Corporate Ethics and Governance  
  Home Guidance Documents Company search File a Report  


Company: Martha Stewart Living Omnimedia, Inc

Track this Company

Five months in jail for Stewart

Date Class
16th Jul 2004 Fraud Investigation
 
Details
Celebrity lifestyle guru Martha Stewart has been sentenced to five months in jail by a New York courtroom over charges of conspiracy and obstruction.

The US trendsetter was convicted in March for lying about a stock sale during a government investigation.

She was given two years supervised release, during which time she will have to wear a monitoring bracelet.

Stewart, 62, also has to pay a $30,000 fine (16,000).

Her lawyer has said she would be appealing the sentence but experts say it is unlikely any appeal would be successful.

US District Court Judge Miriam Goldman Cedarbaum said that she had given Stewart one of the more lenient sentences.

She could have given her a maximum of 16 months in prison.

Martha Stewart shares soared 27% after her sentencing.

The conviction against Stewart centred on a tip-off she received from her stockbroker, information that enabled her to save a few thousand dollars by selling shares in the drug company Imclone Systems just days before its price plummeted.

The charges followed a sale by Stewart of $228,000 worth of shares in Imclone Systems on 27 December 2001.

Prosecutors contended she was tipped that Imclone Systems founder Sam Waksal was trying to sell his shares.

Stewart's sale came a day before Imclone announced that the US Food and Drug Administration had not approved its anti-cancer drug, Erbitux.

The news led to a sharp fall in Imclone's shares.

Stewart claimed she had an agreement to sell shares in the company when the stock price fell below $60.

But the government argued she sold the shares because she had been tipped off in advance about the FDA announcement.

She then lied to investigators about the stock sale, and was convicted of two counts of making false statements, one of obstructing justice and one of conspiracy.

Stewart had denied that this was the case, but the court found against her.

Her call for the charges to be thrown out centred on the testimony given during her court case by US Secret Service laboratory director Larry Stewart - no relation.

He has been charged with lying while testifying as an expert witness about ink on a worksheet kept by Martha Stewart's stockbroker. He has pleaded not guilty to the charges.

 

 

 


Corporate Ethics and Governance is a service from International Charter
Use of this Service is acceptance of the Terms of Agreement
EU Privacy Shield