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Martha Stewart Papers Raise New Doubts

Aug 26, 2002 |

Many of the documents handed over yesterday by Martha Stewart's lawyers ahead of a deadline set by a Congressional committee probing insider trading appeared to have been edited or blacked out, according to people close to the investigation.

The home design icon's legal team edited some of the more than 1,000 pages of papers to maintain privacy for her company, Martha Stewart Living Omnimedia, these people said.

But the tampering has made members of the committee, who are investigating insider trading at ImClone, the biotechnology company, suspicious, and they have insisted that the lawyers meet them next week to compare the original documents to the copies they submitted.

Ms Stewart's compliance with the request has been closely watched because her level of co-operation will determine whether the committee forces her to testify publicly about her sale of nearly 4,000 ImClone shares last December.

The sale has raised suspicions because it was made the day before the Food and Drug Administration rejected the company's cancer drug, Erbitux.

Ms Stewart has denied any wrongdoing.

In June authorities arrested her friend, Sam Waksal, the former ImClone chief, for allegedly trying to sell his shares and tipping off family members before the FDA announcement.

The committee requested the materials from Ms Stewart two weeks ago amid doubts about her version of events.

The committee is expected to spend several weeks reviewing the documents before deciding whether to make Ms Stewart testify.

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