Roadtoad
Bufo Caminus Inedibilis
You kind of had to guess that this one was coming...
NEW YORK (Reuters) - Martha Stewart, who built a catering business into a media and design empire, faces a criminal indictment related to her sale of shares in ImClone Systems Inc., a biotech firm run by a close friend.
The U.S. Attorney's Office for the Southern District of New York intends to seek a grand jury indictment against Stewart, her company, Martha Stewart Living Omnimedia Inc., said in a statement. It also said it expects a civil complaint by the Securities and Exchange Commission
The latest development in the year-long probe dragged the stock down as much as 20 percent as investors were gathering for the company's annual meeting in New York. Shares ended down $1.68, or 15 percent, at $9.52 on Tuesday.
CNBC television said Stewart could be indicted and arrested as early as Wednesday on obstruction of justice charges, citing unnamed sources familiar with the matter. CNBC said Stewart also was likely to resign as chairman and CEO of her company following any indictment.
But, in a videotaped message played at the annual meeting on Tuesday, Stewart said she would not resign from the company, according to Carolyn Stack, a shareholder who attended the meeting. It was not clear when the message was taped.
Stewart, 61, is under investigation for selling ImClone shares in December 2001, a day before the biotechnology firm said federal regulators had turned down a review of an experimental cancer drug.
Stewart and ImClone's co-founder, Sam Waksal, were close friends, often seen and photographed together at events in New York. Investigators have been probing whether she was among a group of friends and family members whom Waksal is accused of having tipped about the U.S. Food and Drug Administration's plans to reject company's experimental cancer treatment.
A federal law enforcement source said the investigation has focused on whether Stewart engaged in insider trading and whether she lied to congressional investigators.
BEST CASE SCENARIO NO LONGER SEEN POSSIBLE
The new developments were viewed by analysts as ending all remaining hope that Stewart could dodge deeper entanglement and mend the costly damage inflicted on her magazine, television and merchandising businesses.
"The best-case scenario -- that the investigations would conclude without resulting in formal charges -- is apparently no longer a possible outcome," Alissa Goldwasser, an analyst with William Blair & Co, said in a note.
Stewart's attorney, Robert Morvillo, said that if indicted, Stewart would plead innocent and pursue the case through trial. Morvillo could not be reached for comment on the CNBC report.
At Morvillo's office in midtown Manhattan, a staff member said Stewart had been in and out of that office on Tuesday morning.
At the Martha Stewart Living shareholders' meeting, company director Arthur Martinez responded to a shareholder question by saying it was "categorically untrue" that Stewart had resigned.
"Martha remains chairman and CEO, " said Martinez, who is a former chairman of Sears Roebuck & Co.
"It was a very quiet meeting," Martinez said to reporters after the meeting. "There were strong statements of support for Martha through this difficult time. She expressed her gratitude for that support." He was flanked Sharon Patrick, president of Stewart's company.
Martha Stewart Living said in a statement that the company "and its board of directors have been planning for a number of possible contingencies, are evaluating the current situation and will take action as appropriate."
STEWART SOLD IMCLONE SHARES FOR $227,000
Stewart sold nearly 4,000 shares of ImClone on Dec. 27, 2001, at $58 each for a total of $227,824. At that time, her stake in her own company was worth about $500 million. On Dec. 28, 2001, ImClone said the FDA had rejected application for its cancer drug, Erbitux, sending ImClone shares plummeting.
Stewart has steadfastly maintained that she engaged in no wrongdoing.
Waksal, 55, was removed as head of ImClone a year ago and last fall pleaded guilty to six of the 13 charges in the case. He will be sentenced next week for insider trading and for tax evasion charges stemming from a separate probe into high-dollar art purchases.
In recent days, ImClone shares have risen sharply after the company disclosed positive results from new clinical trials of Erbitux, reaching their highest level since January 2002.
What isn't mentioned in the Reuters story is that Stewart was also a huge Democrat supporter. The fact that no one from the DNC is coming forward with assistance is telling, I think. They've either got her dead to rights within the SEC, or, perhaps, they're too afraid of how much more they'll be tainted with scandal with this one. (Don't forget Global Crossings and other companies, including Enron, which all supported the DNC.)
I don't trust these people. Not one damn bit.
NEW YORK (Reuters) - Martha Stewart, who built a catering business into a media and design empire, faces a criminal indictment related to her sale of shares in ImClone Systems Inc., a biotech firm run by a close friend.
The U.S. Attorney's Office for the Southern District of New York intends to seek a grand jury indictment against Stewart, her company, Martha Stewart Living Omnimedia Inc., said in a statement. It also said it expects a civil complaint by the Securities and Exchange Commission
The latest development in the year-long probe dragged the stock down as much as 20 percent as investors were gathering for the company's annual meeting in New York. Shares ended down $1.68, or 15 percent, at $9.52 on Tuesday.
CNBC television said Stewart could be indicted and arrested as early as Wednesday on obstruction of justice charges, citing unnamed sources familiar with the matter. CNBC said Stewart also was likely to resign as chairman and CEO of her company following any indictment.
But, in a videotaped message played at the annual meeting on Tuesday, Stewart said she would not resign from the company, according to Carolyn Stack, a shareholder who attended the meeting. It was not clear when the message was taped.
Stewart, 61, is under investigation for selling ImClone shares in December 2001, a day before the biotechnology firm said federal regulators had turned down a review of an experimental cancer drug.
Stewart and ImClone's co-founder, Sam Waksal, were close friends, often seen and photographed together at events in New York. Investigators have been probing whether she was among a group of friends and family members whom Waksal is accused of having tipped about the U.S. Food and Drug Administration's plans to reject company's experimental cancer treatment.
A federal law enforcement source said the investigation has focused on whether Stewart engaged in insider trading and whether she lied to congressional investigators.
BEST CASE SCENARIO NO LONGER SEEN POSSIBLE
The new developments were viewed by analysts as ending all remaining hope that Stewart could dodge deeper entanglement and mend the costly damage inflicted on her magazine, television and merchandising businesses.
"The best-case scenario -- that the investigations would conclude without resulting in formal charges -- is apparently no longer a possible outcome," Alissa Goldwasser, an analyst with William Blair & Co, said in a note.
Stewart's attorney, Robert Morvillo, said that if indicted, Stewart would plead innocent and pursue the case through trial. Morvillo could not be reached for comment on the CNBC report.
At Morvillo's office in midtown Manhattan, a staff member said Stewart had been in and out of that office on Tuesday morning.
At the Martha Stewart Living shareholders' meeting, company director Arthur Martinez responded to a shareholder question by saying it was "categorically untrue" that Stewart had resigned.
"Martha remains chairman and CEO, " said Martinez, who is a former chairman of Sears Roebuck & Co.
"It was a very quiet meeting," Martinez said to reporters after the meeting. "There were strong statements of support for Martha through this difficult time. She expressed her gratitude for that support." He was flanked Sharon Patrick, president of Stewart's company.
Martha Stewart Living said in a statement that the company "and its board of directors have been planning for a number of possible contingencies, are evaluating the current situation and will take action as appropriate."
STEWART SOLD IMCLONE SHARES FOR $227,000
Stewart sold nearly 4,000 shares of ImClone on Dec. 27, 2001, at $58 each for a total of $227,824. At that time, her stake in her own company was worth about $500 million. On Dec. 28, 2001, ImClone said the FDA had rejected application for its cancer drug, Erbitux, sending ImClone shares plummeting.
Stewart has steadfastly maintained that she engaged in no wrongdoing.
Waksal, 55, was removed as head of ImClone a year ago and last fall pleaded guilty to six of the 13 charges in the case. He will be sentenced next week for insider trading and for tax evasion charges stemming from a separate probe into high-dollar art purchases.
In recent days, ImClone shares have risen sharply after the company disclosed positive results from new clinical trials of Erbitux, reaching their highest level since January 2002.
What isn't mentioned in the Reuters story is that Stewart was also a huge Democrat supporter. The fact that no one from the DNC is coming forward with assistance is telling, I think. They've either got her dead to rights within the SEC, or, perhaps, they're too afraid of how much more they'll be tainted with scandal with this one. (Don't forget Global Crossings and other companies, including Enron, which all supported the DNC.)
I don't trust these people. Not one damn bit.
