NEW YORK (CNN/Money) - Former ImClone Systems Inc. CEO Samuel Waksal, who faces charges related to insider trading of company stock, is holding plea negotiations with federal prosecutors, court papers revealed Friday.

Waksal's attorney, Mark Pomerantz, has been engaged in discussions with federal prosecutor Michael Schachter concerning a possible settlement of the case, the court papers said.

News of the plea negotiations was previously reported by CNN/Money.

"It is further found that Mark Pomerantz, Esq., counsel for defendant, and Assistant U.S. Attorney Michael S. Schachter have been engaged in, and are continuing, discussions concerning a possible disposition of the case," the documents said.

Pomerantz could not be reached for comment. A spokesman for Waksal also could not be reached for comment.

A U.S. magistrate Friday granted an extension on the deadline for federal prosecutors to indict the former ImClone CEO. The U.S. Attorney's Office for the Southern District of New York now has until July 26. Waksal was arrested in June and charged with securities fraud, conspiracy and perjury.

The extension gives the government more time to seek a plea from Waksal, who was charged last month with trying to sell ImClone stock and tipping off family members to sell their stock after he learned that the Food and Drug Administration would reject an application for an ImClone (IMCL: up $0.54 to $7.37, Research, Estimates) cancer drug. Homemaking entrepreneur Martha Stewart, a friend of Waksal's, also is being investigated for selling nearly 4,000 shares in the company the day before the news of the rejection was made public.

Waksal may plead guilty to insider trading-related charges to protect others in his family from being indicted in the case, a person familiar with the situation has told CNN/Money. Waksal's father, Jack, and daughter, Aliza, sold shares and could face charges, press reports have said.

Attorneys for Jack and Aliza Waksal could not be reached for comment.