Martha Stewart Indicted and in Court
06/04/2003 AT 01:00 PM EDT
Stewart's lawyer, Robert Morvillo, has previously said that she will declare her innocence.
Stewart, 61, has been the target of an investigation for having dumped her shares of the biotech company ImClone Systems Inc. in December 2001, one day before the Food and Drug Administration declined to approve its colon cancer drug.
The ImClone stock sale reportedly saved her $225,000; in January, Stewart told the New Yorker magazine that she had lost about $400 million because of her company's declining value, legal fees and lost business opportunities in the wake of the scandal.
Following this week's developments, CNBC reports that Stewart is likely to resign as chairman and CEO of her company, Martha Stewart Living Omnimedia Inc.
Among the criminal charges Stewart might face are obstruction of justice, lying to federal investigators and possibly insider trading. She may also face a civil lawsuit from the Securities and Exchange Commission for securities fraud.
In a statement released Tuesday, Omnimedia confirmed that Stewart's attorneys told the company that she is the target of a criminal investigation by the U.S. Attorney's Office for the Southern District of New York. The company said its board of directors has been planning for a number of possible contingencies, and was evaluating the current situation.
On Tuesday, Martha Stewart Living Omnimedia stock fell sharply in the wake of the board meeting's revelation, dropping $1.68 (or 15 percent) to close at $9.52 on the New York Stock Exchange.