Shares of Martha Stewart Living Omnimedia (MSO) hit all-time lows Wednesday after a report cast new doubts on Chief Executive Martha Stewart's account of her entanglement in the ImClone insider trading scandal.

Federal prosecutors have widened their probe of the home decorating diva to include possible obstruction of justice and making false statements related to the sale of ImClone Systems Inc., a person close to the matter told the Wall Street Journal.

Stewart is under investigation by federal prosecutors about whether she had inside information when she sold nearly 4,000 shares of ImClone a day before the drugmaker's experimental cancer treatment was rejected.

Shares of Martha Stewart were down $2.80, or 20 percent, at $10.94 in morning trading on the New York Stock Exchange. Earlier the stock hit $10.05, a new historic low.

The stock, the fifth biggest losers on NYSE, has fallen over 28 percent through Tuesday's close since Stewart's ImClone trades were uncovered on June 6.

The stock was trading down on news of the new investigation, said Davenport & Co. analyst George Smith.

"It shows that (federal prosecutors) are being fairly relentless in their attack," said Smith. "Some had hoped the issue might pass, but its obviously not going to pass in the near term."

Stewart is a close friend of Sam Waksal, the former chief executive of ImClone. Waksal was arrested two weeks ago on charges of insider trading.

She has repeatedly denied any wrongdoing, saying she had an agreement with her broker at Merrill Lynch and Co., Peter Bacanovic, to sell her ImClone stock if it fell below $60 a share.

However, Douglas Faneuil, Bacanovic's 26-year old sales assistant, told Merrill Lynch lawyers he did not know of any agreement and initially confirmed Stewart's account under pressure from his boss, according to the Journal.