New York
Federal investigators have warned Martha Stewart they plan to charge her with insider trading. Stewart became ensnarled in the downfall of flashy biotech executive Sam Waksal in December when she sold 4,000 shares in Waksal’s company, ImClone Systems, shortly before the stock tanked. Prosecutors believe Stewart made the sale after receiving a tip that the government had refused to clear ImClone’s new cancer wonder drug for sale. The mess has sent stock in Stewart’s own company, Martha Stewart Omnimedia, spiraling down 60 percent. Securities investigators sent word to Stewart’s lawyers last week that they were recommending she face civil securities-fraud charges. Prosecutors are mulling criminal charges.
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