Sam's Club

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Stewart says her broker had standing instructions to sell ImClone if it dipped below $60 (she sold at $58), but she has yet to produce any evidence of a formal "stop-loss" order. Sources say there never was one; Stewart left oral instructions in mid-December with Bacanovic, whose office called for permission to sell when the stock dipped on Dec. 27. Federal investigators are now trying to determine whether Stewart gave the go-ahead before or after placing her call to Waksal. The House Energy and Commerce Committee has asked Stewart twice for copies of three basic documents — the stop-loss order, the executed sell (which should have the time on it) and her phone logs — and could soon resort to issuing a subpoena. "We simply cannot accept 'Take my word for it,'" says committee spokesman Ken Johnson.

Sam Waksal owns property in the fashionable Hamptons on Long Island. He plays tennis with Icahn and poker with Nelson Peltz, the onetime corporate raider and current CEO of Triarc. Waksal's Dec. 27 phone log testifies to his standing. Some entries:

"Tara from Talk Magazine must have the photos by Friday"

"11:05 Carl Icahn ... He is traveling tonight to Florida"

"11:20 Patricia and Callie [sic] want to bring you lunch today"

That would be Democratic fund raiser and serial billionaire-dater Patricia Duff and her daughter Caleigh by ex-husband Ron Perelman, chairman of Revlon. Then there's the Stewart entry, followed by: "2:07 Could Alan have your Knicks tickets?" No word yet on who Alan is or if he got to the game.

According to a complaint issued by the U.S. Attorney in New York, Waksal owes $80 million to several banks, and $65 million of the debt is secured by ImClone shares. Private investigators say he used 21 of his most prized artworks — by Picasso, Chagall, Giacometti and others — as collateral for one of his dozens of loans. He has been sued several times — for bouncing checks and for unpaid bills — and has been slapped with numerous tax liens.

Erbitux, though, promised to wash those troubles away. Last October Sam and Harlan sold stock for $57 million and $54 million, respectively, as part of a deal with Bristol-Myers. But Harlan followed up with a second sale worth $50 million on Dec. 6--just two days after the FDA first privately indicated to ImClone that there might be problems with the Erbitux application. His attorney told the Los Angeles Times that the timing of that sale was "coincidental."

Few dispute that Erbitux has great potential, and Sam Waksal's supporters say he deserves the credit. "Erbitux would not have gotten this far, this fast, without Sam," says Icahn, who held ImClone shares last year but sold them months before the FDA rejection. It was in April 1999 that Shannon Kellum, 28 and diagnosed with incurable colon cancer, began taking Erbitux. Within months her tumors had shrunk to a fifth their previous size. Much of the hype around ImClone was built on that one success. ImClone was so eager to cash in that, according to the FDA, it mishandled the clinical trials, prompting the agency to deny its application.

The Erbitux controversy raised questions at last week's congressional hearings on ImClone as to whether FDA protocol encourages insider trading. But agency officials contend that frequent communication with applicants is essential. "If a sponsor chooses to act on that information and insider trade, that's his responsibility," says Robert Temple, director of the FDA's oncology-drug evaluation group. And last week, without naming names, Treasury Secretary Paul O'Neill suggested a solution to the escalating crisis of executives abusing trust. "We ought to hang them from the very highest branches."