A Republican congressman investigating Martha Stewart’s ImClone Systems Inc. stock sale said Sunday the media mogul will “probably” be subpoenaed by the House Energy and Commerce Committee.
“I think Martha Stewart has been less than candid with us,” Rep. Jim Greenwood, R-Pa., told Paula Zahn on CNN’s Late Edition with Wolf Blitzer.
“We’ve told her that we want information about her phone call records, her e-mail records, and that we want that by the 20th of August,” Greenwood said. “If she does not provide the information to us voluntarily, then we will subpoena that information.”
Stewart faces scrutiny over her decision to sell nearly 4,000 shares of ImClone stock Dec. 27. A day later, the Food and Drug Administration announced it would not approve a cancer drug developed by the biotech firm, and ImClone stock plummeted.
ImClone chief executive Sam Waksal was indicted Wednesday on fraud, perjury, obstruction of justice, and conspiracy charges. Prosecutors say he tried to sell his own ImClone stock the day before the FDA announcement.
Waksal faces 125 years in prison and an $8.5 million fine if he is convicted on all 13 counts. His attorney says Waksal, who is scheduled for arraignment Monday, is “presumed innocent.”
“The evidence points in the direction that her brokers informed [Stewart], at a minimum, that the Waksal family was trading its stock because of impending news, and we think that’s why she should come forward and talk to us,” Greenwood said Sunday.
Stewart has denied all accusations of insider trading. According to her attorney, “At no time did Ms. Stewart ever receive from anyone any information concerning any action of the FDA with regard to ImClone or any planned or imminent announcement by ImClone of any action by the FDA.”
Greenwood said he is dubious of the denials. “I think that Martha Stewart’s story continues to change, and I think that’s unfortunate.”
He added, “We have a responsibility to make sure that there’s integrity in the marketplace, and we can’t sweep something like this under the rug just because Martha Stewart is a celebrity.”