FORMER MEDIMMUNE EXECUTIVE SETTLES INSIDER TRADING CASE WITH SEC

FOR IMMEDIATE RELEASE
2004-132

Defendant Eric Tsao Barred From Serving as Officer or Director of Public Company, Enjoined From Violating Antifraud Provisions of the Federal Securities Laws and Ordered to Pay Over $500,000

Tsao Also Enters Guilty Plea for Felony Securities Fraud and Perjury

Washington, D.C., Sept. 17, 2004 - The Securities and Exchange Commission announced today that it has reached a settlement of the pending insider trading charges against Eric I. Tsao, a former executive at MedImmune, Inc., a biotechnology company based in Gaithersburg, Md. The SEC's complaint, originally filed on June 2, 2003, alleged that Tsao engaged in three separate episodes of insider trading between September 1999 and December 2001, from which he realized aggregate illicit profits of $146,850.00. The SEC's complaint also alleged that when Tsao testified before the SEC staff during the investigation of this matter, he falsely denied having placed or authorized any of the relevant trades in two of the three separate instances of insider trading - and provided a false alternative explanation for the trading.

Without admitting or denying the allegations of the complaint, Tsao consented to the entry of a Final Judgment against him that permanently enjoins him from future violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; bars him from acting as an officer or director of a public company; requires him to disgorge $146,850.00 in illicit profits, and $24,758.30 in pre-judgment interest thereon; and orders him to pay civil money penalties, pursuant to Section 21A of the Exchange Act, in the amount of $220,275.00 and a Remedies Act penalty, pursuant to Section 21(d)(3) of the Exchange Act, of $110,000.00. The Final Judgment permits Tsao to offset his payment of disgorgement and civil penalty by the corresponding amounts, if any, of criminal restitution and criminal fines, respectively, that he pays in connection with the parallel criminal proceeding described below. The Final Judgment is subject to the approval of the United States District Court.

Also today, in a related criminal proceeding, the United States Attorneys' offices for the District of Maryland and for the District of Columbia announced that Tsao -- in a proceeding held today before the Honorable Henry H. Kennedy, Jr., United States District Court Judge for the District of Columbia -- has pled guilty to one felony count of criminal insider trading and one felony count of perjury arising from false statements that Tsao made to the SEC staff during the investigation.

Paul R. Berger, Associate Director of the SEC's Division of Enforcement, stated, "It is crucial to note that the criminal action brought today targeted not only the underlying insider trading at issue in the Commission's case against Mr. Tsao, but also prosecuted him for providing false sworn testimony to the staff during the Commission's investigation. The successful prosecution of Mr. Tsao for perjury sends the powerful message that there are severe consequences for those who would seek to obstruct a Commission investigation by lying to the SEC staff."

The SEC's complaint alleged that on each of three occasions, within days after learning that MedImmune was involved in confidential negotiations concerning a possible business combination with another public company - the first being U.S. BioScience, Inc., the second ImClone Systems, Inc., and the third Aviron - Tsao bought stock in the other company (and, in the case of ImClone, MedImmune stock as well). On each occasion, according to the complaint, Tsao bought the stock over the Internet in a securities account that, although nominally held by his parents in Taiwan, Tsao had opened, controlled, treated as his own, funded with his own assets, and drawn monies from to pay his household expenses. The complaint also alleged that, after Tsao learned that NASD Regulation, Inc. (NASDR) was investigating trading in one of the stocks at issue, he took steps to distance himself from this account, and later provided a false explanation of his trading to the SEC staff.

The SEC's allegations regarding the three episodes of insider trading, and Tsao's conduct after his trading came under scrutiny, are summarized below.

• On Sept. 16 and 17, 1999, Tsao bought 6,000 shares of U.S. BioScience after he had previously learned that MedImmune was at an advanced stage in confidential negotiations concerning a possible acquisition of U.S. BioScience. The acquisition was publicly announced on Sept. 22, 1999, and Tsao sold the U.S. BioScience stock on Sept. 30, 1999, for a profit of $18,000.

• On Dec. 4 and 14, 2000, Tsao bought 2000 shares of MedImmune stock and 2000 shares of ImClone stock, respectively, based on limit orders placed in late November. The purchases were made after Tsao had learned that the two companies were involved in negotiations to jointly manufacture ImClone's then leading cancer drug in development. Ultimately, the contemplated venture fell through, but ImClone eventually consummated a similar agreement with a major pharmaceutical company nearly a year later, which involved a partial tender offer from which Tsao realized profits of $50,475 upon the tender of some of the ImClone shares.

• On Nov. 23, 2001, Tsao bought 10,000 shares of Aviron after he had previously learned that MedImmune was in confidential negotiations concerning a possible acquisition of Aviron. The acquisition was publicly announced on Dec. 3, 2001, and Tsao sold the Aviron stock on Dec. 26, 2001 for a profit of $146,132.

• After learning in Feb. 2002 that NASDR was investigating trading in Aviron securities, Tsao called his online brokerage firm on several occasions to obtain information that would facilitate his creation of an innocent explanation for his Aviron trading. In one call, during which he claimed to be his father, Tsao also changed the password for Internet access to the account in question, which had previously consisted of characters reflecting his own personal information. He later changed the e-mail address on the account, which had previously been his own e-mail address at MedImmune.

• When Tsao testified before the SEC staff on Oct. 15, 2002, he falsely denied having placed or authorized any of the relevant trades in U.S. BioScience or Aviron, and provided a false alternative explanation for the trading.

The SEC acknowledges the assistance of the United States Attorneys' Offices for the District of Maryland and for the District of Columbia, and the FBI in the investigation of this matter. The SEC also wishes to thank the National Association of Securities Dealers-Regulation for their assistance in this matter.

For more information, contact:

Paul Berger
Associate Director, Division of Enforcement
(202) 942-4854