NEW YORK — Federal prosecutors have stepped up their insider-trading investigation of Martha Stewart, reinterviewing witnesses and meeting with her lawyers in recent weeks, sources close to the case say.
The recent burst of activity has renewed speculation, after months in which the case had appeared to lose momentum, that Stewart could eventually face such criminal charges as insider trading or obstruction of justice.
The Securities and Exchange Commission already has signaled that it will file a civil complaint that could cost Stewart heavy fines and her job as chief executive of her company.
The 61-year-old chairwoman and CEO of Martha Stewart Living Omnimedia Inc. (MSO) came under suspicion after selling 3,928 ImClone Inc. shares worth about $228,000 on Dec. 27, 2001. The day after she sold her stock, the Food and Drug Administration announced it would not review the biotech company's application for a promising cancer drug, Erbitux. The stock plummeted on the bad news.
Investigators suspect that Stewart received a tip from her friend ImClone founder Samuel Waksal and that members of his family were unloading their own stock as well. Stewart, through her lawyers, has denied any wrongdoing. Waksal is awaiting sentencing after pleading guilty last year to fraud and insider trading. He faces up to 65 years in prison but could get far less under sentencing guidelines. full story at FOX news.