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Martha Stewart Inquiry Set For Subpoena Ruling

Sep 5, 2002 | FT.Com

Congressional investigators have concluded their probe into possible insider trading by Martha Stewart, and are expected to announce on Tuesday whether they will issue a subpoena for her to appear before Congress.

Ken Johnson, the spokesman for the House Energy and Commerce committee, raised the possibility on Thursday that the committee might still recommend criminal charges against Ms Stewart for obstruction of justice.

"We believe someone has lied to the committee and possibly conspired to obstruct a Congressional investigation," Mr Johnson said. "That's why we're pursuing this so doggedly."

However, people familiar with the investigation, said they expected the committee would not issue a subpoena to force Ms Stewart to appear, but instead draw up a report of evidence gathered in the case and refer it to the Justice Department.

Billy Tauzin, chairman of the committee, has already requested three "recess subpoenas" earlier this week for Global Crossing and Qwest, but none was sought for Ms Stewart, according to a person close to the committee.

"To subpoena her now will take a vote," the person said. "I don't see that happening." Authorities have been investigating whether Ms Stewart relied on inside information when she sold nearly 4,000 shares of ImClone, a biotechnology company, the day before the Food and Drug Administration publicly rejected its promising new cancer drug.

A grand jury has already indicted Sam Waksal, the company's founder and a close friend of Ms Stewart, for allegedly trying to sell his shares and tip off family members just before the FDA announcement.

Ms Stewart has denied any wrongdoing. But investigators claim there have been repeated inconsistencies between her story and that of Mr Waksal.

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