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Wednesday, 21 August, 2002, 04:44 GMT 05:44 UK
Martha Stewart hands over files
Martha Stewart web page
Martha Stewart's business has suffered because of the scandal
Lawyers for Martha Stewart, the US domestic goddess, have handed over documents to Congress regulators investigating her alleged involvement in the ImClone insider trading scandal.

The US House Energy and Commerce Committee demanded documents, including Ms Stewart's email and telephone records from December to January, to establish any link with the affair.


Clearly there have been some inconsistencies in her story

Ken Johnson
House Committee
The probe centres around her sale of ImClone shares a day before the stock slumped, on news that it had failed to get a licence for a new anti-cancer drug.

The self-styled design guru, who founded Martha Stewart Living Omnimedia, has denied any wrongdoing and so far declined to meet with investigators.

A spokeswoman for the House committee confirmed that it had received about 1,000 pages of documents from the lawyers.

The documents include e-mails from Ms Stewart's laptop as well as phone records from her publishing company.

Long-running saga

The committee is expected to need a couple of weeks to examine the documents and establish whether Ms Stewart had any private knowledge of the company's fortunes before the sale.

There is confusion about the order of events.

Samuel Waksal, former chief executive, ImClone
Samuel Waksal: Fraud charge

Ms Stewart claims she had already ordered her broker to sell ImClone shares as soon as their price went below $60.

But an alleged phone call between her broker's assistant and Ms Stewart has fuelled a suggestion that she was given insider information which prompted her subsequent sale of 4,000 shares.

The broker, Peter Bacanovic, was suspended from his bank Merrill Lynch following an investigation into the sale.

Former ImClone chief executive Samuel Waksal, a close friend of Mrs Stewart, has been charged with fraud after he sold shares days before they slumped.

"Clearly there have been some inconsistencies in her story, and we are anxious to clear those up as soon as possible," said Ken Johnson, a spokesman for the House committee.

A change of image

The ongoing investigation has blighted Ms Stewart's previously clean-cut image.

Shares in Martha Stewart Living, which publishes once hugely popular lifestyle magazines and books, have dropped by more than 50% since the scandal erupted at the end of last year.

And a large shareholder is suing her because of the drop in value of his investment as a result of her involvement in the events.

The House Committe said they understood the celebrity status of Ms Stewart, but were not giving her any special treatment.

Despite the investigation and furore surrounding her, Ms Stewart is continuing to grace US television screens with her cooking tips.

Shares in her company closed at $9.05 on Tuesday, compared with a 12-month high of $20.93.

 WATCH/LISTEN
 ON THIS STORY
The BBC's Patrick O'Connell
"The deadline will make the beginning of a new chapter"
See also:

20 Aug 02 | Business
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12 Jun 02 | Business
26 Oct 01 | Business
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