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Wednesday, 7 August, 2002, 06:18 GMT 07:18 UK
Martha Stewart called to testify
Martha Living website
The share price of Martha Stewart Living has suffered
Martha Stewart, the business woman and icon of US domesticity, is under increasing pressure to testify about her alleged involvement in an insider-trading scandal.

US congressional investigators have asked Ms Stewart for e-mails and other records, as part of their probe into her sale of shares in drugmaker ImClone.

Martha Stewart, chairman and chief executive of Martha Stewart Living Omnimedia
Ms Stewart says it's 'premature' to meet with investigators
Ms Stewart sold her shares late last year just before the company's stock plummeted following the rejection of its application to license a new anti-cancer drug.

In a letter to Ms Stewart's lawyer, the House Energy and Commerce Committee reiterated its request for an interview with Ms Stewart.

The committee wants to clarify discrepancies between her account of the sale and that of her broker and his assistant.

However, Ms Stewart declined to meet with the investigators, maintaining that such an interview would be premature.

Crossed wires

In her account of the share sale, she says that her broker had an order to sell ImClone if the stock went below $60.


Clearly someone is lying to us and we want to find out who it is

Ken Johnson
Spokesman for the House committee
As a result of this, almost 4,000 shares were sold on 27 December, a day before the drug license was turned down.

But her broker Peter Bacanovic of Merrill Lynch has a different version of when the order to sell the shares was placed.

There is also confusion over a supposed phone call that took place between the broker's assistant, Douglas Faneuil, and Ms Stewart, where he reportedly advised her to sell the shares.

Phone records obtained by the committee show no record of such a call.

"Clearly someone is lying to us and we want to find out who it is," said Ken Johnson, a spokesman for the House committee.

Sam Waksal, ImClone's former chairman and a close friend of Ms Stewart, was arrested on insider-trading charges on 12 June.

Cooperation?

Ms Stewart's lawyer said they would try to comply with the committee's request for additional documents.

Congressman on the committee have hinted that Ms Stewart's cooperation with the committee has not been sufficient, raising the prospect that they might subpoena her.

As chief executive and chairman of Martha Stewart Living Omnimedia, Ms Stewart also faces a law suit from a disgruntled shareholder.

The shareholder - known as Conrad Hahn - claims that he has suffered losses of $75,000 as a result of Ms Stewart becoming embroiled in the insider-trading scandal.

See also:

04 Aug 02 | Business
22 Jun 02 | Business
12 Jun 02 | Business
26 Oct 01 | Business
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