Stewart Inquiry Said Widened

Martha Stewart may be facing a wider probe of her sale of ImClone Systems Inc. shares, including possible charges of obstruction of justice and making false statements.

In a story posted on its Web site late Tuesday, The Wall Street Journal, citing an unnamed source familiar with the case, said federal prosecutors had widened their investigation to determine whether Stewart had misled prosecutors in divulging details about her sale of ImClone Systems stock.

Congressional investigators are examining whether Stewart had inside information when she sold nearly 4,000 shares of the biotech company in December a day before the Food and Drug Administration announced that it had decided not to consider ImClone’s experimental drug for combating colorectal cancer, Erbitux.

Stewart, who commands a multimedia empire and a profitable corporation, increasingly is under the glare of government scrutiny and tabloid attention -- bringing investor displeasure.

In her weekly appearance on CBS’ “The Early Show,” an exasperated Martha Stewart told television viewers she hoped her entanglement in an insider trading scandal would be resolved soon and she would “be exonerated of any ridiculousness.”

Stewart chopped cabbage while Early Show host Jane Clayson pressed her to comment on the news that her stockbroker, Peter Bacanovic, had been suspended by Merrill Lynch and asked whether that complicated matters for her.

“I’m just not at liberty at this time to make any comments whatsoever,” she told Clayson. “I certainly hope that the matter is resolved in the very near future.”

Stewart has repeatedly denied any wrongdoing in the stock sale.

Shares of Martha Stewart Living have tumbled 34% since June 6, when reports of her ImClone trading surfaced. The stock rose Tuesday, gaining $1.05 to close at $13.60 on the New York Stock Exchange.

Rep. James C. Greenwood (R-Pa.), chairman of a House subcommittee that investigating the ImClone matter, told CNN that his panel hoped to draw conclusions about Stewart’s stock sale “within another week or so.”