Probe centers around sale of 4,000 shares in ImClone
WASHINGTON — The U.S. Securities & Exchange Commission has put embattled home decorating mogul Martha Stewart on notice that civil charges of insider trading could be filed against her.
The SEC declined comment on the case, saying all pending matters are confidential.
In recent days, Stewart received a Wells Notice form the SEC. The notice is used to alert those under investigation that agency staffers want to file civil charges.
The Stewart probe centers around her sale of 4,000 shares in ImClone one day before the Food & Drug Administration turned the company down for a new cancer drug.
Former ImClone topper Sam Waksal, whom Stewart has long been acquainted with, pleaded guilty last week to several insider trading charges.
Stewart has maintained that she had a standing order to sell her ImClone shares if the price dropped below a certain point.
The Wells Notice dispatched in recent days by the SEC gives Stewart a chance to respond to staffers looking into the ImClone transaction.
This summer, Rep. W.J. “Billy” Tauzin (R-La.) and other Capitol Hill solons repeatedly asked Stewart to meet with congressional investigators. Stewart, while turning over documents relating to the stock transaction, refused the invitations.
A frustrated Tauzin, chairman of the influential House Commerce Committee, ultimately asked the U.S. Dept. of Justice to investigate whether Stewart lied to Capitol Hill staffers.
Like the SEC, the DOJ has declined comment on whether it will comply with Tauzin’s request.
Stewart’s company, Martha Stewart Living Omnimedia, has taken a heavy hit since the ImClone controversy first erupted.
Earlier this month, Stewart resigned as a board member of the New York Stock Exchange.
Stewart’s spokesperson could not be reached for comment late Monday.