The former boss at biotechnology firm ImClone Systems has been released from the custody of federal authorities after posting bail in the amount of $10m (�7m).

Samuel Waksal, who was arrested early Wednesday on charges of conspiracy, securities fraud and perjury, entered no plea in the case in a New York court.

Mr Waksal exploited his position and disregarded his responsibility to shareholders...

SEC spokeswoman

Mr Waksal, who up until three weeks ago served as the firm's chief executive, stands accused of tipping family members and others to sell shares of ImClone the day before federal regulators refused to review its new cancer drug.

A US magistrate ordered Mr Waksal to surrender his passport and restrict his travel to the New York City area.

His next court appearance is scheduled for 12 July.

Blocked sale

He was taken into custody early Wednesday morning by four officers from the Federal Bureau of Investigation (FBI) at his home in New York.

The charges arose out of the sale of ImClone stock in late December by Mr Waksal and members of his family hours before the US Food and Drug Administration (FDA) rejected an application for the firm's new cancer drug.

"Mr Waksal exploited his position and disregarded his responsibility to shareholders to basically protect his and his family's wealth," said Helene Glotzer, an assistant director at the New York office of the Securities and Exchange Commission (SEC).

The SEC and the Department of Justice (DoJ) allege sales of ImClone stock were executed based on knowledge passed from Mr Waksal to his family and at least two others.

Martha Stewart sold shares just before they tumbled

On 26 December, relatives sold $19m (�12.9m) worth of ImClone stock, two days before the FDA announced it would not review Erbitux, ImClone's cancer-fighting drug.

According to papers filed with the court on Wednesday, Mr Waksal learned on 25 December of the probable FDA action from his brother, who now serves as ImClone's current chief executive.

Based on that information, Mr Waksal allegedly attempted to sell nearly 80,000 shares of the company's stock but was blocked by doing so by two brokerage firms, which refused to execute the sale.

Family involvement

Among those who sold shares were Mr Waksal's daughter, Aliza, who cashed in nearly $2.5m worth of shares on 27 December.

Other Waksal family members, including another daughter and her husband, as well as Mr Waksal's father and sister also sold shares in the day or so before the FDA action.

In addition, domesticity-guru Martha Stewart unloaded all 3,000 of her shares two days before the FDA action, although she has denied acting on non-public information.

Shares in her firm, Martha Stewart Living Omnimedia, fell almost 10% on Wednesday as investors took heed of her friendship with Mr Waksal.

Analyst George Smith of Davenport & Co said the stock was falling on "concerns related to Martha Stewart's dealings with ImClone."

Meanwhile, shares of ImClone, which have fallen 80% since the FDA announcement, lost another 4% in late-afternoon trading on Wednesday in New York but climbed back to close up 28 cents at $7.83.