Martha Stewart Charged With Insider Trading
NewsMax.com Wires
Wednesday, June 4, 2003
Domestic and Democrat diva Martha Stewart was indicted today by a federal grand jury in Manhattan on charges involving insider stock trading.
The grand jury returned nine counts. The Securities and Exchange Commission was also expected to file a civil complaint.
Stewart's troubles began in December 2001 when she sold nearly 4,000 shares of ImClone Systems stock for nearly $230,000 the day before the Food and Drug Administration rejected the company's application for a cancer drug.
The price of the stock plummeted with the FDA's announcement.
Analysts say the indictment could damage Martha Stewart Living Omnimedia, of which Stewart is CEO and chief stockholder.
Stewart has said publicly she had standing oral orders to sell the stock when it dropped below $60 a share. She contended she was being targeted for an investigation because of her activities in the Democrat party and that Republican contributors associated with corporate scandals were not.
ImClone founder Samuel Waksal, who also sold stock before the FDA's announcement, pleaded guilty last year to charges involving insider trading.
An assistant Merrill Lynch broker, Douglas Faneuil, pleaded guilty to lying to investigators about the reasons behind Stewart's ImClone sale.
The Washington Post and other publications say Faneuil has told investigators he informed Stewart about sales of the stock by Waksal family members before she made her decision to sell the 4,000 shares.
Copyright 2003 by United Press International.
All rights reserved.
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