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Tune in to your TV's to watch Martha demonstrate how to make a Prison Cell feel like home then how to make Prison food taste like home cooking! 
NEW YORK (Reuters) - Martha Stewart (news - web sites), who built a catering business into a media and design empire, faces a criminal indictment related to her sale of shares in ImClone Systems Inc., a biotech firm run by a close friend.
The U.S. Attorney's Office for the Southern District of New York intends to seek a grand jury indictment against Stewart, according to a statement from her company, Martha Stewart Living Omnimedia Inc.. The company also said it expects a civil complaint by the Securities and Exchange Commission (news - web sites).
The latest development in the year-long probe dragged the company's stock down as much as 20 percent as investors were gathering for the company's annual meeting in New York. The shares ended down $1.68, or 15 percent, at $9.52 on Tuesday.
CNBC television said Stewart could be indicted and arrested as early as Wednesday on obstruction of justice charges, citing unnamed sources familiar with the matter.
A federal law enforcement official with knowledge of the case told Reuters an indictment could come as early as this week.
CNBC also said Stewart was likely to resign as chairman and CEO of her company following any indictment.
But, in a videotaped message played at the annual meeting on Tuesday, Stewart said she would not resign from the company, according to Carolyn Stack, a shareholder who attended the meeting. It was not clear when Stewart's message was taped.
Stewart, 61, is under investigation for selling ImClone shares in December 2001, a day before the biotechnology firm said federal regulators had declined to review its marketing application for an experimental cancer drug.
Stewart and ImClone's co-founder, Sam Waksal, were close friends, often seen and photographed together at events in New York. Investigators have been probing whether she was among a group of friends and family members whom Waksal is accused of having tipped about the U.S. Food and Drug Administration (news - web sites)'s plans to reject the company's experimental cancer treatment.
A federal law enforcement source said the investigation has focused on whether Stewart engaged in insider trading and whether she lied to congressional investigators.
BEST-CASE SCENARIO NO LONGER SEEN POSSIBLE
The new developments were viewed by analysts as ending all remaining hope that Stewart could dodge deeper entanglement and mend the costly damage inflicted on her magazine, television and merchandising businesses.
"The best-case scenario -- that the investigations would conclude without resulting in formal charges -- is apparently no longer a possible outcome," Alissa Goldwasser, an analyst with William Blair & Co., said in a note.
Stewart's attorney, Robert Morvillo, said that if indicted, Stewart would plead innocent and pursue the case through trial. Morvillo could not be reached for comment on the CNBC report.
At Morvillo's office in midtown Manhattan, a staff member said Stewart had been in and out of that office on Tuesday morning.
At the Martha Stewart Living shareholders' meeting, company director Arthur Martinez responded to a shareholder question by saying it was "categorically untrue" that Stewart had resigned.
"Martha remains chairman and CEO," said Martinez, a former chairman of Sears Roebuck & Co.
"It was a very quiet meeting," Martinez told reporters after the meeting. "There were strong statements of support for Martha through this difficult time. She expressed her gratitude for that support." Martinez was flanked Sharon Patrick, president of Stewart's company.
Martha Stewart Living said in a statement that the company "and its board of directors have been planning for a number of possible contingencies, are evaluating the current situation and will take action as appropriate."
STEWART SOLD IMCLONE SHARES FOR $227,000
Stewart sold nearly 4,000 shares of ImClone on Dec. 27, 2001, at $58 each for a total of $227,824. At that time, her stake in her own company was worth about $500 million. On Dec. 28, 2001, ImClone said the FDA had rejected its application for its cancer drug, Erbitux, sending ImClone shares plummeting.
Stewart has steadfastly maintained that she engaged in no wrongdoing.
Waksal, 55, was removed as head of ImClone a year ago, and last fall he pleaded guilty to six of the 13 charges in the case. He will be sentenced next week for insider trading and for tax evasion charges stemming from a separate probe into high-dollar art purchases.
In recent days, ImClone shares have risen sharply after the company disclosed positive results from new clinical trials of Erbitux, reaching their highest level since January 2002.
ImClone shares closed on Tuesday at $33.55, after trading below $20 as recently as May 23. (Additional reporting by Kenneth Li, Reshma Kapadia, Timothy Dobbyn, Emily Kaiser, Jean Scheidnes, Angela Moore, Paul Thomasch)
NEW YORK (Reuters) - Martha Stewart (news - web sites), who built a catering business into a media and design empire, faces a criminal indictment related to her sale of shares in ImClone Systems Inc., a biotech firm run by a close friend.
The U.S. Attorney's Office for the Southern District of New York intends to seek a grand jury indictment against Stewart, according to a statement from her company, Martha Stewart Living Omnimedia Inc.. The company also said it expects a civil complaint by the Securities and Exchange Commission (news - web sites).
The latest development in the year-long probe dragged the company's stock down as much as 20 percent as investors were gathering for the company's annual meeting in New York. The shares ended down $1.68, or 15 percent, at $9.52 on Tuesday.
CNBC television said Stewart could be indicted and arrested as early as Wednesday on obstruction of justice charges, citing unnamed sources familiar with the matter.
A federal law enforcement official with knowledge of the case told Reuters an indictment could come as early as this week.
CNBC also said Stewart was likely to resign as chairman and CEO of her company following any indictment.
But, in a videotaped message played at the annual meeting on Tuesday, Stewart said she would not resign from the company, according to Carolyn Stack, a shareholder who attended the meeting. It was not clear when Stewart's message was taped.
Stewart, 61, is under investigation for selling ImClone shares in December 2001, a day before the biotechnology firm said federal regulators had declined to review its marketing application for an experimental cancer drug.
Stewart and ImClone's co-founder, Sam Waksal, were close friends, often seen and photographed together at events in New York. Investigators have been probing whether she was among a group of friends and family members whom Waksal is accused of having tipped about the U.S. Food and Drug Administration (news - web sites)'s plans to reject the company's experimental cancer treatment.
A federal law enforcement source said the investigation has focused on whether Stewart engaged in insider trading and whether she lied to congressional investigators.
BEST-CASE SCENARIO NO LONGER SEEN POSSIBLE
The new developments were viewed by analysts as ending all remaining hope that Stewart could dodge deeper entanglement and mend the costly damage inflicted on her magazine, television and merchandising businesses.
"The best-case scenario -- that the investigations would conclude without resulting in formal charges -- is apparently no longer a possible outcome," Alissa Goldwasser, an analyst with William Blair & Co., said in a note.
Stewart's attorney, Robert Morvillo, said that if indicted, Stewart would plead innocent and pursue the case through trial. Morvillo could not be reached for comment on the CNBC report.
At Morvillo's office in midtown Manhattan, a staff member said Stewart had been in and out of that office on Tuesday morning.
At the Martha Stewart Living shareholders' meeting, company director Arthur Martinez responded to a shareholder question by saying it was "categorically untrue" that Stewart had resigned.
"Martha remains chairman and CEO," said Martinez, a former chairman of Sears Roebuck & Co.
"It was a very quiet meeting," Martinez told reporters after the meeting. "There were strong statements of support for Martha through this difficult time. She expressed her gratitude for that support." Martinez was flanked Sharon Patrick, president of Stewart's company.
Martha Stewart Living said in a statement that the company "and its board of directors have been planning for a number of possible contingencies, are evaluating the current situation and will take action as appropriate."
STEWART SOLD IMCLONE SHARES FOR $227,000
Stewart sold nearly 4,000 shares of ImClone on Dec. 27, 2001, at $58 each for a total of $227,824. At that time, her stake in her own company was worth about $500 million. On Dec. 28, 2001, ImClone said the FDA had rejected its application for its cancer drug, Erbitux, sending ImClone shares plummeting.
Stewart has steadfastly maintained that she engaged in no wrongdoing.
Waksal, 55, was removed as head of ImClone a year ago, and last fall he pleaded guilty to six of the 13 charges in the case. He will be sentenced next week for insider trading and for tax evasion charges stemming from a separate probe into high-dollar art purchases.
In recent days, ImClone shares have risen sharply after the company disclosed positive results from new clinical trials of Erbitux, reaching their highest level since January 2002.
ImClone shares closed on Tuesday at $33.55, after trading below $20 as recently as May 23. (Additional reporting by Kenneth Li, Reshma Kapadia, Timothy Dobbyn, Emily Kaiser, Jean Scheidnes, Angela Moore, Paul Thomasch)
