Stewart, 61, the founder, chairman and chief executive of Martha Stewart Living Omnimedia Inc., is also expected to be named in a civil complaint by the Securities and Exchange Commission. Her lawyers were notified in September that the SEC had sufficient evidence to bring a complaint against her.
It is unclear whether Stewart will continue in her roles at the company, where she is also the biggest shareholder. The company and its board “have been planning for a number of possible contingencies, are evaluating the current situation and will take action as appropriate,” the company’s statement said. If Stewart is indicted and chooses to settle the charges, she could be required to step down as part of a settlement.
A spokeswoman for Martha Stewart Living Omnimedia said there would be no additional comment about the case. A spokesman for the U.S. attorney’s office in Manhattan, which is conducting the criminal investigation, also would not comment. Stewart’s personal spokeswoman did not immediately return calls made to her office.
The announcement, made before the stock market opened on a day when shareholders of Martha Stewart Living Omnimedia were gathering in Manhattan for the company’s annual meeting, indicated that efforts by Stewart’s lawyers to persuade investigators not to charge her with any crime had come to an end.
“They probably gave her the courtesy of a heads-up so she could get the news out herself,” said Marvin Pickholz, a lawyer who represents Douglas Faneuil, the 27-year-old assistant stockbroker whose testimony undermined Stewart’s explanation for her ImClone trade.