Is The Game Up For Martha ?

The Wall Street Journal reports that, according to 'people familiar', US regulator The Securities & Exchange Commission (SEC) has now told American icon Martha Stewart that it will recommend filing civil securities-fraud charges against her for the alleged 'insider dealing' sale of shares in ImClone Systems in December last year.

Investigators having been building a case against Ms Stewart for months. She has always denied wrongdoing and puts down her sale of ImClone Systems' shares to a long-arranged 'stop-loss' agreement with her Merrill Lynch broker rather than an attempt to sell the shares quickly as she had obtained price-sensitive information.

Ms Stewart sold 4,000 ImClone shares just one day prior to the US Food & Drug Administration announced that it would not licence the company's so-called cancer wonder-drug, Erbitux, and the shares went into freefall.

Unfortunately for Ms Stewart, her Merrill Lynch broker's assistant, Douglas Faneuil, is believed to have confirmed that there was no 'stop loss' arrangement in place and her friend, former ImClone CEO, Samuel Waksal, has now pleaded guilty to a raft of insider dealing and other charges. Both Faneuil and Waksal are now cooperating with investigators.

Ms Stewart would almost certaily have to step down from the public company that bears her name should the SEC bring a complaint against her.

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