Stewart quits NYSE board
Lifestyle entrepreneur Martha Stewart resigned from the New York Stock Exchange board of directors yesterday, just a day after a Merrill Lynch & Co. employee pleaded guilty to charges growing out of an investigation into whether Stewart illegally relied on insider information to sell shares of a biotechnology company.
The resignation was the latest sign of deepening troubles for Stewart and the business empire she built around her personality, Martha Stewart Living Omnimedia Inc., said legal and stock analysts.
"I think it's a sign that the walls are closing in on her," said John Coffee, Columbia Law School professor.
"The other decision that's probably being discussed with more intensity is her own board and whether they need to name someone else CEO," he said, noting that the investigation surrounding her activities is likely to consume her attention in the months ahead.
Stewart is chairman of the board and CEO as well as the major shareholder in the company.
The ongoing investigation concerns whether Stewart relied on insider information from her close friend Samuel Waksal, then chief executive of ImClone Systems Inc., when she sold her shares last year just a day before the biotechnology company announced that regulators had rejected the test results of its much heralded cancer drug.
On Wednesday Douglas Faneuil, an assistant to the broker who handled the sale, pleaded guilty to accepting payments to withhold information about the sale.
Stewart said in a statement about her resignation that she did not "want the media attention currently surrounding me to distract from the important work of the NYSE."