Martha digests sour news on stock, suit

Hearing in civil case set for November

NEW YORK — NBC’s biopic about Martha Stewart may have been a big hit for the Peacock on Monday, but her real-life financial situation took another hit Tuesday.

The domestic diva’s stocks have plummeted this week after a U.S. federal judge refused to dismiss a lawsuit accusing Stewart of withholding information from shareholders in her company, Martha Stewart Living Omnimedia (MSO).

A pretrial hearing for the case has been set for November.

The allegations stem from an investigation of Stewart by the Securities & Exchange Commission and the Justice Dept. over Stewart’s dumping nearly 4,000 shares of ImClone Systems stock in December 2001, just before the FDA announced it was rejecting the company’s cancer drug.

Stewart has denied any wrongdoing.

Shareholders claim Stewart did not disclose information about the SEC investigation, which hurt the company’s stock when it was revealed.

On Monday, when the case was dismissed, MSO stock dove by 7.42% to $10.61. By Wednesday it had dropped to $10.36.

A representative for Martha Stewart Living said, “The company is confident that the allegations asserted against the company in the shareholder litigation are completely without merit.”

This just days after reports were circulated that Stewart might sidestep the lawsuit, which drove stocks up as high as $12.12 last Thursday.

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