By Sarah N. Lynch

WASHINGTON (Reuters) – ABC News reported on Friday that former U.S. national security adviser Michael Flynn is prepared to testify that President Donald Trump directed him to make contact with Russians when he was a presidential candidate.

Reuters could not immediately verify the report, which cited a Flynn confidant. The news sent U.S. stocks sharply lower. [nL3N1O14E8]

Flynn, a former top Trump campaign aide and a central figure in a federal investigation into Moscow’s alleged interference in the 2016 U.S. presidential election, pleaded guilty on Friday to lying to the FBI.

His plea agreement, and his decision to cooperate with the investigation led by Special Counsel Robert Mueller, marked a major escalation in a probe that has dogged Trump’s administration since the Republican president took office in January.

Flynn acknowledged making false statements about contacts he had with Russia’s ambassador to the United States, Sergei Kislyak, last year. The charges carry sentence of up to five years in prison.

Flynn was fired from his White House post in February for misleading Vice President Mike Pence about his conversations with the ambassador.

Moscow has denied a conclusion by U.S. intelligence agencies that it meddled in the election campaign to try to sway the vote in Trump’s favor. Trump has denied any collusion by his campaign.

(Reporting by Susan Heavey and Tim Ahmann; Additional reporting by John Walcott and Nathan Layne; Writing by Alistair Bell; Editing by Frances Kerry)