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Subcommittee Chairman: Stewart 'Probably' Will Be Subpoenaed on ImClone Stock Sale

A lawmaker leading the House investigation into ImClone stock sales said Sunday that Martha Stewart probably will be subpoenaed on her possible involvement in an insider trading scandal.

"We can't sweep something like this under the rug because Martha Stewart is a celebrity, and so I think that we're probably going to have to subpoena her," said Rep. James D. Greenwood, chairman of the House Energy and Commerce oversight and investigations subcommittee.

Committee investigators have been trying to resolve discrepancies between Stewart's account of the sale of nearly 4,000 shares of ImClone a day before the stock plunged and those of her now-suspended Merrill Lynch broker and his assistant.

Stewart's friend, former ImClone CEO Samuel Waksal, was arrested in June on charges he secretly advised family members to sell their ImClone stock on Dec. 27 after learning that his biotech company's highly promoted cancer drug had been rejected by the Food and Drug Administration.

Stewart maintains she simply had an order to sell her stock when it went below $60. But doubt has been cast on that assertion because she and her Merrill Lynch broker, Peter Bacanovic, differ on when the order was placed.

Bacanovic's assistant, Douglas Faneuil, originally said there was such an order but has since changed his story.

The House committee requested some of Stewart's e-mails, records from her business manager and phone records for its investigation.

Stewart, who commands a multimedia empire as chief executive of Martha Stewart Living Omnimedia Inc., has refused to meet with the investigators. Her lawyers say they would do everything they can to comply with the committee's request for additional documents.

"We've told her we want information about her phone call records, her e-mail records and we want that by the 20th of August," Greenwood, R-Pa., said in a television interview.

"If she provides that information to us voluntarily, we will review it. If she does not provide the information to us voluntarily, then we will subpoena that information. Then we will make a decision as to whether we need to call her forward under subpoena and we may have to do that."

A message left for Stewart spokeswoman Allyn Magrino in New York was not immediately returned.