Martha Stewart 'faces' civil charges

Stewart is under Justice Department investigation

The US stock market regulator has reportedly notified Martha Stewart that it plans to recommend civil securities fraud charges over her sale of ImClone Systems shares.

The Securities and Exchange Commission (SEC) issued Ms Stewart what is called a Wells Notice, the Wall Street Journal reported.

It gives her an opportunity to explain her actions before the SEC makes its final decision, but is usually a formality before charges are filed.

Ms Stewart's spokesperson and the head of her company, Living Omnimedia, both declined to comment.

The notice would be the latest setback for Ms Stewart and her multimedia company.

Ms Stewart resigned from the board of the New York Stock Exchange earlier this month.

An SEC spokesman declined to comment on the report.

Home making

Shares in Ms Stewart's Living Omnimedia, which had gained 11% on Monday, lost 14% in after hours trade when the story appeared.

The homemaking television personality, and former Wall Street stockbroker, is already being investigated by the Justice Department over the sale of her ImClone shares.

She sold her almost 4,000 shares last December, a day before the US Food and Drug Administration rejected the company's Erbitux cancer drug.

Ms Stewart, who is friends with ImClone founder Sam Waksal who has pleaded guilty to a string of fraud charges, has denied any wrongdoing.

Mr Waksal did not implicate Ms Stewart.