Brian Hiatt
June 26, 2002 AT 04:00 AM EDT

Martha Stewart, already the subject of an insider-trading investigation, is facing an expanded probe that could lead to charges of obstruction of justice and making false statements, according to a Wall Street Journal report cited by the Associated Press. Federal prosecutors are investigating whether Stewart gave misleading answers about her sale of ImClone System’s stock a day before it slid on news that the FDA rejected its experimental cancer drug, the Journal reported, citing an anonymous source familiar with the case.

Stewart is a close friend of ImClone CEO Sam Waksal, who was arrested two weeks ago on charges of insider trading. She proclaimed her innocence in a Tuesday morning appearance on CBS’ ”Early Show.” ”I think this will be resolved in the very near future and I will be exonerated,” she told the show.

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