U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 19128 / March 9, 2005

SEC V. ZVI FUKS, A.K.A. ZVI FUCHS AND SABINA BEN-YEHUDA, A.K.A. SONIA BEN YEHUDA, 05 Civ. 2668 (JES) (S.D.N.Y.)

SEC CHARGES ZVI FUKS AND SABINA BEN-YEHUDA WITH INSIDER TRADING

The United States Securities and Exchange Commission (“Commission”) announced that it filed charges today in the United States District Court for the Southern District of New York alleging illegal insider trading in ImClone stock in December 2001 by Zvi Fuks, 68, of New York, New York, and Sabina Ben-Yehuda, 51, an Israeli citizen residing in New York, New York. The Commission’s complaint alleges that Fuks and Ben-Yehuda violated Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder when they sold shares of ImClone after receiving an illegal tip from Samuel D. Waksal, ImClone’s co-founder and CEO at the time.

Specifically, the Commission’s complaint alleges that on the evening of December 26, 2001, Waksal privately learned in advance of any official notice or public announcement that the United States Food and Drug Administration (“FDA”) would reject consideration of ImClone’s application to approve its primary product, a cancer treatment called Erbitux. On December 27, Waksal tipped Ben-Yehuda, who then passed the news onto Fuks. That same day, while in possession of this material, non-public information, Ben-Yehuda sold over $73,000 and Fuks sold over $5 million of ImClone stock. ImClone received written notification of the FDA’s decision in the afternoon on December 28, and publicly announced the FDA’s decision in a press release at about 6:00 p.m. that day. This news prompted ImClone’s stock price to drop 16%, from $55.25 to $46.46, by the close of the next trading day, December 31. By engaging in insider trading before the public disclosure of ImClone’s disappointing news, Fuks and Ben-Yehuda illegally avoided trading losses.

In its lawsuit, the Commission seeks an order permanently enjoining Fuks and Ben-Yehuda from future violations of the provisions of the federal securities laws that the Commission’s complaint charges them with violating, disgorgement of Fuks’ and Ben-Yehuda’s losses avoided plus prejudgment interest and civil penalties.

The Commission previously settled a separate insider trading case against Waksal for conduct surrounding the same events as here in which Waksal consented to the entry of an order (1) holding him jointly and severally liable with his father, Jack Waksal, for disgorgement of $1,947,804, representing Jack Waksal and Patti Waksal’s losses avoided, plus prejudgment interest; (2) requiring Waksal to pay a civil money penalty in the amount of $3,017,464; (3) ordering him to pay disgorgement and prejudgment interest of $804,367, representing his daughter Aliza Waksal’s losses avoided; (4) permanently enjoining Waksal from future violations of the provisions of the federal securities laws that the Commission charged him with violating; and (5) permanently barring him from acting as an officer or director of any public company.

The Commission’s investigation is ongoing. The Commission acknowledges the assistance of the United States Attorney’s Office for the Southern District of New York and the Federal Bureau of Investigation in the investigation of this matter.

SEC Complaint in this matter

http://www.sec.gov/litigation/litreleases/lr19128.htm