WASHINGTON — U.S. congressional investigators Tuesday threatened to subpoena records of home decorating guru Martha Stewart, as new doubts swirled about her stated reasons for selling her ImClone Systems shares just ahead of bad news for the company.
The U.S. House Energy & Commerce Committee demanded Stewart turn over email and telephone records, as well as reconsider her refusal to submit to an interview with the panel’s investigators.
Stewart is being investigated for possible insider trading for selling almost 4,000 shares of ImClone before the company announced regulators had refused to review its cancer drug, Erbitux. She has denied wrongdoing, citing a pre-existing arrangement to sell the stock if it fell below $60 a share.
The Wall Street Journal reported Tuesday that Merrill Lynch & Co. trading assistant Douglas Faneuil has thrown new doubt on the pre-existing arrangement, telling authorities he called Stewart to warn her that ImClone’s then-chief exec Samuel Waksal was selling his shares.
“We are through asking nicely. Clearly someone has been lying to us, and we’re going to find out who it is,” committee spokesman Ken Johnson told Reuters. “We’ll subpoena any documents she refuses to provide.”
Attempts to reach Stewart for comment through Martha Stewart Living Omnimedia or her lawyers were not immediately successful.
Stewart’s lawyers told the committee in June that she ordered the sale of the shares after a call from her broker at Merrill, Peter Bacanovic.
As a result, the House committee Tuesday demanded Stewart turn over all communications to and from her email accounts related to ImClone, Waksal or her account at Merrill from Dec. 1-Jan. 9.
The lawmakers also sought Stewart’s telephone records and those of her business manager, Heidi DeLuca, for the same time period, as well as any records in DeLuca’s possession related to ImClone.