Reported Talks Boost Martha Stewart Shares
A report that Martha Stewart is in talks to settle the insider trading investigation into one of her stock deals sent shares of her company surging Tuesday in heavy trading.
Lawyers representing Stewart met with prosecutors from the Department of Justice as recently as last week and a potential deal could be weeks away, according to a report in the Financial Times.
A spokeswoman for Stewart declined to comment.
A spokesman from the Southern District of New York, the branch of the Justice Department that is handling the probe, also declined to comment.
Shares of Martha Stewart Living Omnimedia Inc. closed at $10.65, up $1.35, or 15%, on the New York Stock Exchange.
The investigation surrounds Stewart’s sale of nearly 4,000 shares of biotech concern ImClone Systems Inc. in December 2001, just before the company released news that the Food and Drug Administration rejected its cancer drug.
Investigators have indicated they suspect Stewart received a heads-up about the news from Samuel Waksal, a friend and the founder of ImClone, or from her broker at Merrill Lynch.
Waksal has pleaded guilty to insider trading charges.
Stewart has denied any wrongdoing, saying the trade was based on a pre-placed order to sell once the stock price fell below $60 a share.
From Dow Jones/Associated Press
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