detailed information about its sale of ImClone put options. However, | find it needn’t do so in its

complaint.

For the reasons stated herein, Waksal’s Motion to Dismiss and For a More Definite

Statement is DENIED.
ENTER:
\ AGS
N
Jame B. Zagel h
Unitgd States Digtrict Fudge
DATE: 20



ImClone stock,” Accordingly, I find that Samuelson’s claims related to trading that took place
on December 27, 2001 may stand.
TL_Rules 12(c) and 9(b)

In his motion, Waksal also asks me to order, pursuant to Rule 12(e), a more definite
statement as to the “others” who bought ImClone put options from Samuelson. As a general
rule, the court should order a more definite statement “when a defendant is unclear about the
meaning of a particular allegation in the complaint.” 4m. Nurses’ Ass'n v. Illinois, 783 F.2d 716,
725 (7 Cir. 1986). Rule 12(e), Waksal argues, is particularly relevant to an allegation of fraud,
which, according to Rule 9(b), must be pled “with particularity.” The purpose of the heightened
pleading standard under Rule 9(b) is to provide the defendant fair notice of the basis of plaintiff's
claim and to protect defendant’s reputation from groundless accusations of fraud. Dexia Credit
Local v. Rogan, No. 02 C 8288, 2003 U.S. Dist. LEXIS 18368 at *30 (N.D. Ill. Oct. 10, 2003).

Samuelson’s Complaint succeeds in this purpose. The Complaint adcquately details the
alleged fraud and provides fair notice of the claims. Specifically, it alleges that Waksal learned
of material, nonpublic information on December 26, 2001 and, without disclosing that
information, caused his daughter to sell stock and purchased put options on December 27, 2001
and December 28, 2001 respectively. Samuelson further alleges that this led it to scll ImClone
put options to both Waksal and to others at a price that was below their actual market valuc' on

December 27" and December 28", To prove these damages, Samuelson will have to provide

' Had Samuelson Icarned that the FDA was going to reject ImClone’s application to
approve Erbitux, ImClone’s primary product, it would have set a higher price for the ImClone
put options.



4
Minute Orucr Foor (06/97)

United States District Court, Northern District of Minois

came of Assigned Jud; 4 - Sitting Judge if Oth

“ or iogivrate Tudge James B. Zagel chan Assigned Judge

CASE NUMBER 03 C $200 DATE 4/14/2004
CASE SAMUELSON TRADING CORP. V. SAMUEL D. WAKSAL
TITLE

[In the following box (a) indicate the party filing the motion, e.g,, plaintiff, defendant, 3rd party plaintiff, and (b) stele bricfly the nature

of the mation being presented.]

MOTION:

DOCKET ENTRY:

qd) o Filed motion of [ use listing in “Motion” box above.]

(2) o Briet in support of motion duc

QB) a Answer brief to motion duc___.. Reply to answer brief duc___

{4) Oo Ruling/Hearing on _ssetfor_ at

(5) oO Stats hearing[held/continued to] [sct for/re-set for] on set for__— at

(6) oO Pretrial conference[held/continued to] [set for/re-set for]on___——set for at.
(7) Oo Triallset for/re-sct for]on_ at.

(8) oO [Bench/Jury trial] [Hearing] held/continued to __at__

(9) o This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]

OOFRCP4(m) OlLocal Rule 41.1 OPRCP4I(a\(1) 0 FRCP4I(a)(2).

al
Mail AO 450 form. docketfad deputy initials

Copy to judge/magistrate judge,

date led noize
courtroom ie

DW deputy's
initials

Date/time reecived in
central Clerk's Office mailing deputy iiiats

(10) Mi [Otherdocket entry) Motion (14-1) to dismiss and (14-2) for more definite statement is denied.
Enter Memorandum Opinion and Order.
di) [For further detail see order attached to the original minute order.)
No notices required, advised in open court
No notices requited. unter of ies :
Notices mailed by judge's staff. A
Notitied counsel by telephunes PR i § 2004
VY | vocketing to muil notices i



UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF [ILLINOIS
EASTERN DIVISION

SAMUELSON TRADING CORP.,

Plaintiff,

v. No, 03 C 5200
Judge James B. Zagel

SAMUEL D. WAKSAL,

Defendant.

MEMORANDUM OPINION AND ORDER

This lawsuit arises out of Defendant Samuel Waksal’s allegedly improper purchase of
ImClone put options from Plaintiff Samuelson Trading Corp. (“Samuelson”). In Counts T-III of
its Complaint, Samuelson alleges that Waksal willfully and intentionally violated Section 10(b),
Rule 10b-5, and Section 20A of the Securities Exchange Act of 1934. Waksal now moves to
dismiss Count IT of the Complaint in its entirety and/or certain portions of Count I and Ti,
pursuant to Fed. R, Civ. P. 12(b)(6), and for a more definite statement as to Count IIT, pursuant to
Fed, R. Civ. P. 12(e) and 9(b).
L_ Rule 12(b\(6

A motion to dismiss under Rule 12(b)(6) is proper whete it appears beyond doubt that the
plaintiff can prove no set of facts in support of his claim, which would entitle him to relicf.
Conley vy. Gibson, 355 U.S. 41, 45-46 (1957). In reviewing a motion to dismiss, the court must
construe all allegations in the complaint in the light most favorable to the plaintiff and accept all
well-pled facts and allegations as true. Bontkowski v. First Nat'l Bank, 998 F.2d 459, 461 (7th

Cir. 1993).

\3



Waksal moves to dismiss Count II on the grounds that a plaintiff may not, in the
alternative, seek damages against a defendant under Section 10b/Rule 10b-5 and Scction 20A.
Count I seeks damages for Samuclson’s sale of 110 ImClone put options to Waksal, in violation
of Section 10(b) and Rule 10b-5, and Count II secks damages for Samuelson’s contemporaneous
sale of ImClone put options to persons other than Waksal, in violation of Section 20A, Waksal
relies on Fujisawa Pharm. Co. v. Kapoor, 115 F.3d 1332, 1337 (7" Cir. 1997) to support the
proposition that a plaintiff may not simultaneously maintain a Section 10b/Rule 10b-5 and a
Section 20A claim against a single defendant,

In Fujisawa, the Court found that a cause of action under Section 20A applied only where
the contemporancous trading was done with a party other (han the defendant. /d. To find
otherwise, the Court reasoned, would allow the plaintiff two causes of action for the same
violation. 4d Since the plaintiff in Fujisawa had only traded with the defendant, the Court found
that a Section 20A claim could not be used alternatively with a Section 10(b) claim, /d. In this
case, unlike Figisawa, the put option sales on which Samuelson bases its Section 20A claim are
independent of the put option sales made by the defendant. Since Samuelson made
contemporaneous sales of lmClone put options to persons other than Waksal, I find it may
properly assert both a Section 10(b)/Rule 10b-5 and a Section 20A claim against Waksal.

Waksual also moves to dismiss any portion of Count I or Count II related to trades made
by Samuclson on December 27, 2001. Waksal argues that neither Rule 10b-5 nor Section 20A
allows recovery for trading activity engaged in before the date he allegedly traded on material,
non-public information. While this may be true, Samuelson does allege that Waksal’s improper

trading began on December 27" when he “caused his daughter to sell $2 million worth of