US biotech company ImClone has agreed to settle a class-action lawsuit for $75 million in cash, putting to rest an insider-trading scandal that sent US domestic diva Martha Stewart to jail.
The company will take a one-off fourth-quarter $55.4 million charge for the settlement; insurance companies will pay a portion of the obligation.
Shareholders brought the suit in 2002, after the Food & Drug Administration (FDA) rejected ImClone's initial application for colon cancer treatment Erbitux, sending stock plummeting. They alleged they were deliberately misled over Erbitux's chances of receiving regulatory approval.
Sam Waksal, then chief executive, was later convicted of insider trading for selling shares before announcing the drug's failure to the public. Family members were also involved in the scandal. Last week Sam and his father, Mr Jack Waksal, paid $5 million in fines to the Securities and Exchange Commission.
ImClone said it was not admitting any wrongdoing in settling the suit, and that it reserved the right to pursue its own charges against Sam Waksal.
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