Posted on 06/15/2002 3:09:45 AM PDT by kattracks
Martha Stewart's word is not enough.
Congressional investigators said yesterday they want proof to back up her story of why she dumped stock in ImClone — the company owned by close pal Sam Waksal — a day before it plummeted.
"We have no reason not to believe her, but this is an official investigation and we simply do not accept 'Take my word for it,'" said House Energy and Commerce Committee spokesman Ken Johnson.
As the ImClone controversy swirled around her, the diva of domesticity hunkered down — canceling her hyper-active social and business schedule.
Johnson said his panel hoped to get answers from Stewart and her lawyers soon.
"They've written a letter to us restating the events which occurred on Dec. 27, and we've made it clear to them that we will need written documentation to corroborate her story," he said.
"If we don't get something in the next week or so from Martha Stewart's attorneys, then we'll follow up with an official request in writing," Johnson said.
The panel could then issue a subpoena if Stewart stonewalls.
Pal Busted
Waksal was charged this week with illegally tipping off his daughter and his father to sell a day before the Food and Drug Administration shot down approval of ImClone's anti-cancer drug in December.
Stewart admits she dumped her 3,900 ImClone shares that day, but she insists she did so without inside information. The FDA announcement sent the stock into a tailspin.
A source familiar with the ongoing ImClone investigation told the Daily News yesterday that Stewart's arrangement with the broker to sell the stock appeared to be unusual.
Stewart says that when ImClone was trading around $70 a share, she "discussed" with her broker selling it all if it dipped below $60.
Coincidentally, on Dec. 27 — the day before the FDA shot down ImClone's drug — Stewart says, she returned a call from her broker after the stock fell to $58. At that point, she says, she "reiterated" her instructions to sell.
Johnson of the House committee said Stewart's lawyers said she had "a preexisting agreement with her broker" to sell when it dipped below $60.
Usually, such stop-loss orders are automatic, with a notice sent directly to the exchange in advance to sell the stock if it dips below a set amount.
Sources said federal investigators were looking for such a notice.
According to Johnson, Stewart's lawyers have promised to provide this information to the committee.
Stewart's lawyer and spokeswoman declined to comment yesterday on the existence of the stop-loss order.
The FBI also was trying to corroborate statements Stewart made to agents in April, when she gave her explanation for the Dec. 27 ImClone stock trade, sources said.
And they're comparing her statements with that of her Merrill Lynch broker, Peter Bacanovic, and checking the chronology of events with phone records, e-mails and conversations with others.
Johnson said the panel intends to call Bacanovic's lawyer in the next few days seeking any information that he has regarding the Dec. 27 transaction.
Stewart called her friend Waksal at 1:43 p.m. that day to discuss "something is going on with ImClone," his phone records show.
She insists she didn't talk to Waskal that day and received no insider information that led her to sell the stock.
Meanwhile, stock in Martha Stewart Living Omnimedia took a roller-coaster ride yesterday, falling 8.7% to a nine-month low of $13.50 in early trading before rebounding to $15.25.
Two analysts — including Karl Choi of Merrill Lynch, the brokerage at the center of the controversial stock sale — downgraded the company's shares because of the scandal.
It Just Looks Bad
"We have no knowledge of whether Ms. Stewart committed any improprieties. However, the continued scrutiny ... is likely to cause extra volatility," Choi said after revising his rating from "buy" to "neutral."
Other parts of Stewart's business — including her television show — could feel the sting if she's implicated further.
"If it was to mushroom from here and it got real ugly, a lot of advertisers would be squeamish," Tom DeCabia, executive vice president of media buyer PHD told The News.
CBS, which airs Stewart's show, declined to comment, as did Kmart, which sells Stewart's home furnishings line.
At the Big Kmart on W. 34th St., shoppers weren't ready to toss in any of her floral-bordered towels just yet.
"I think Martha Stewart is a genius," said Mirna Inocencio of Manhattan. "If a man would have done [this], nobody would care."
I don't think so
But, I guess only DemocRAT politicians can get away with this stuff.
Because greedy, shallow people do things like this.
I just read how she was going to host an event for Democratic pols, one of her best friends is Hillary!, and she hosted a fundraiser for Bill the Rapist.
Sources said federal investigators were looking for such a notice
This sounds fair...if there was a stop-loss order in place, she was playing by the rules technically (and it would've been a prudent and fair way to handle things)
Martha Stewart is supposed to be a smart lady, with a Wall Street background. She should know the rules.
Personally, I think her whole cutesy-housey thing should be against the law, and the idea of her teaching prisoners how to make a wall motif out of plastic spoons or whatever is really, really, funny. But I don't know...maybe it's just plain stupid to own stock where there is the opportunity to misuse information. And where's the line between insider trading and a really valuable tip?
When I read of another Clintonite in trouble, it warms my heart.
"You're so "fuc_ing stupid," she once said to her husband in front of guests when he failed to stack firewood according to her specifications. After 25 years of marriage, he left her."
Gee, what a shocker!
No wonder she and Hillary! are friends.
PEOPLE, YOU HAVE TO CHECK OUT THE ABOVE LINK.
Hope they fry the B*!
2.. Martha's towels are all lint.
3. Waksal is no different than all the congressmen yakking about the trade...the only difference being he was clumsy.
4. Congress critters always end up boocoop millionaires...and most is from inside information.
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