NEW YORK (CNN/Money) - Federal prosecutors have notified Martha Stewart they have enough evidence to file criminal charges against her, according to published and broadcast reports.

The New York Daily News, quoting two unnamed sources familiar with the probe, reported Thursday that U.S. Attorney Jim Comey is considering several charges, including securities fraud, obstruction of justice and lying to an FBI agent.

NBC's NewsChannel 4, based in New York, reported a similar story, citing unnamed Justice Department sources who said they believe they have enough evidence to arrest and charge Martha Stewart. Comey's final decision is two months away, the network said.

The Daily News said Stewart's lead criminal lawyer, Robert Morvillo, is arguing in favor of allowing her to avoid criminal charges by settling civil charges with the Securities and Exchange Commission.

Michael Kulstad, a spokesman for the U.S. Attorney's Office, declined to comment on the matter. Stewart attorney James Fitzpatrick did not immediately return a phone call.

On Dec. 27, 2001, Stewart sold 3,928 shares of ImClone Systems (IMCL: Research, Estimates), grossing about $227,824. The next day the Food and Drug Administration refused to accept the biotech company's application for its cancer drug, Erbitux. The stock tumbled on the news.

Stewart has insisted she did nothing wrong, saying she had no advance knowledge of the FDA decision. Stewart says she had an agreement with her broker to sell the shares if they fell below $60.

Investigators have focused on Stewart's friendship with ImClone CEO Sam Waksal, who was trying to sell his ImClone shares ahead of the FDA news and later pleaded guilty to charges related to insider trading.

Stewart, who was traveling by private plane to Mexico at the time, called Waksal after her ImClone sale. Stewart, though her lawyer, has said he did not call her back.

The key witnesses in the case include an assistant to Stewart's broker, Peter Bacanovic. The assistant, Douglas Faneuil, pleaded guilty to a misdemeanor for having lied to the SEC and FBI.

The prosecution's strategy, according to NewsChannel 4, is to decide first whether to charge Bacanovic with insider trading -- and if so, they then will see if he will cut a deal and cooperate against Stewart.

"We have a solid criminal case against Martha Stewart," NewsChannel 4 quoted a Justice Department official as saying.

Legal experts who doubt Stewart traded on inside information note the tiny profit motive for a woman whom Forbes estimates as worth $650 million. In addition, trading activity leaves a detailed electronic trail, leading some to doubt that Stewart, a former stock broker who also was a New York Stock Exchange director, would take such risk

The controversy has taken a toll on Martha Stewart Living Omnimedia Inc. (MSO: down $0.22 to $8.88, Research, Estimates), the company Stewart heads. The shares have fallen more than 50 percent since Stewart was connected to the ImClone matter.

In a New Yorker article last month, Stewart estimated that the investigation has cost her about $400 million, mostly from the decline in value of her more than 30 million shares of Martha Stewart Living Omnimedia, but also in legal fees and lost business opportunities.

But ImClone may have fared worse. Its stock is down about 84 percent since the FDA news.