Martha Stewart

Martha Stewart (born August 3, 1941) is a television and magazine personality known for her cooking, gardening, etiquette, and arts and crafts projects, and as a general lifestyle guide and homemaker. She is also a successful businesswoman and an American icon. Starting in 2002 her career was rocked by a scandal involving her sale of shares in a drug company days before its application for a new drug was denied. She was eventually convicted of lying to investigators and sentenced to prison in 2004. She was released on March 4, 2005. Her current projects include two new television series: Martha and '.

ImClone scandal

Federal indictments and trial

In 2002, Stewart was investigated for alleged insider trading for selling 3,928 shares of ImClone Systems on December 27, 2001 -- an allegation that has never been substantiated nor prosecuted in court. On December 28, the Food and Drug Administration announced it would not review ImClone's application for Erbitux, which the company touted as a promising cancer drug. ImClone's stock plunged over 70 percent in the month after the news came out. Stewart was a friend of ImClone founder Samuel Waksal, (who dated Stewart after first dating her daughter Alexis), who has since pleaded guilty to six counts related to insider trading before the announcement. On June 6, 2002, the U.S. House Energy and Commerce Committee, which was already investigating dubious ImClone trading, announced that it was probing Stewart's stock sale. On June 25, 2002, she appeared on CBS' The Early Show, and when asked by Jane Clayson about the ImClone scandal during a cooking segment, she replied, "I just want to focus on my salad." On October 3, 2002, Stewart resigned from the board of directors of the New York Stock Exchange. Through all the investigation and allegation, Stewart kept her public persona intact, focusing on her homemaking specialties and downplaying or ignoring the increasing clamor for answers about her role in the scandal.

Related Topics:
2002 - Insider trading - ImClone Systems - December 27 - 2001 - December 28 - Food and Drug Administration - Erbitux - Cancer - Samuel Waksal - June 6 - U.S. House - June 25 - CBS - The Early Show - Jane Clayson - October 3 - New York Stock Exchange

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On June 4, 2003, a federal grand jury in Manhattan indicted Stewart and her former broker Peter Bacanovic on nine criminal counts from the U.S. Securities and Exchange Commission (SEC). By selling when she did, the government alleged Stewart avoided losses of $45,673. The charges included securities fraud, obstruction of justice, and conspiracy. Stewart was not indicted on the original charge of insider trading, but only for the coverup that ensued. Stewart pleaded not guilty, saying she had a standing order with Bacanovic to sell her shares if ImClone stock fell below $60. Stewart resigned as CEO and chairman of Martha Stewart Living Omnimedia on the same day she was indicted, but remained on the company's board.

Related Topics:
June 4 - 2003 - Manhattan - Peter Bacanovic - U.S. Securities and Exchange Commission - Obstruction of justice - Conspiracy - ImClone

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The day after her indictment, Stewart took out a full-page advertisement in USA Today and launched a website with an open letter of defense "to my friends and loyal supporters." She said, "I want you to know that I am innocent — and that I will fight to clear my name... The government's attempt to criminalize these actions makes no sense to me... I am confident I will be exonerated of these baseless charges."

Related Topics:
Indictment - USA Today

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The SEC later filed a related civil suit against Stewart with charges of insider trading. Stewart's trial was initially set for January 12, 2004, at the request of her lawyers who said they needed plenty of time to analyze the evidence. The trial eventually began on January 20 In New York City presided over by U.S. District Judge Miriam Goldman Cedarbaum. During the trial, Stewart maintained her innocence.

Related Topics:
January 12 - 2004 - January 20

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On February 27, 2004, Judge Cederbaum threw out the charge of securities fraud which could have led to up to 10 years in prison and a million dollar fine. The judge called the charge "unfounded" and said that "no jury could feasibly find it to be accurate."

Related Topics:
February 27 - 2004

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On March 5, 2004, Stewart was found guilty by a jury of eight women and four men on all four remaining counts against her: conspiracy, obstruction of justice, and two counts of making false statements. http://money.cnn.com/2004/03/05/news/companies/martha_verdict/index.htm The maximum sentence for these convictions combined is 20 years in prison. The jury deliberated for three days following the five-week trial before reaching its verdict. Sentencing was set for June 17. Following Stewart's conviction, a message was posted on her website, reading, in part, "I am obviously distressed by the jury's verdict but I continue to take comfort in knowing that I have the confidence and enduring support of my family and friends. I will appeal the verdict and continue to fight to clear my name. I believe in the fairness of the judicial system and remain confident that I will ultimately prevail."

Related Topics:
March 5 - 2004 - Jury - June 17

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Fallout after conviction

On March 8, 2004, Viacom pulled Martha Stewart Living from its CBS and UPN affiliates, after having moved the show during Stewart's trial from prime daytime timeslots into less desirable early-morning slots (e.g., 2:05am in New York). http://www.detnews.com/2004/entertainment/0403/09/f03-85522.htm On March 15, Stewart resigned from the board of Martha Stewart Living Omnimedia. On May 18, MSO announced that the television show that had started the company, Martha Stewart Living, was going into hiatus, with no announced date of return.

Related Topics:
March 8 - 2004 - Viacom - CBS - UPN - March 15 - May 18

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In an unrelated matter, Stewart faced more legal trouble in February 2004 as her company, Martha Stewart Living Omnimedia, was sued by Kmart for allegedly "double-counting" royalty payments and advertising spending. The companies signed a seven-year deal in 2001 to market Martha Stewart Everyday brand home decorating, garden products, and housewares through Kmart stores. Kmart filed for bankruptcy protection seven months later and has since closed 600 of its 2,100 stores. On April 26, 2004, Kmart withdrew its lawsuit, having reached an agreement with Martha Stewart Living Omnimedia to amend the terms of the June 2001 contract and to extend it through 2009.

Related Topics:
Kmart - April 26 - 2004 - June - 2001 - 2009

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On May 21, 2004, Larry Stewart (no relation), a United States Secret Service lab director who testified for the government against Martha Stewart, was charged with two counts of perjury. Stock in Martha Stewart Living Omnimedia jumped as much as 23 percent on the news. Larry Stewart was an expert witness about the ink on a broker's worksheet, testifying that the note about selling Imclone shares when it dropped below $60 was different from the rest of the ink on the document. The charges arose when Susan Fortunato, a USSS co-worker, complained that she had in fact done the analysis and that it had never been examined by Stewart. Although the jury at the perjury trial felt that Larry Stewart had taken unfair credit for the work done, it did not amount to perjury and he was found not guilty on October 5, 2004. The jury had trouble believing Fortunato, feeling that she had an axe to grind with Stewart.

Related Topics:
May 21 - 2004 - United States Secret Service - Perjury - Martha Stewart Living Omnimedia - October 5

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Sentencing

On July 8, a motion for a new trial was denied, and sentencing was set for July 16. Martha Stewart and Peter Bacanovic were each sentenced to five months in prison, five months of home confinement, and two years probation, for lying about a stock sale, conspiracy and obstruction of justice. Stewart was ordered to pay a $30,000 fine, while Bacanovic was fined $4,000. The judge stayed the sentence while they prepared their appeals. http://www.msnbc.msn.com/id/5444565

Related Topics:
July 8 - July 16

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On September 15, 2004, accompanied by her lawyers and members of the board of directors of Martha Stewart Living Omnimedia, Stewart held a press conference to announce her decision to begin serving her sentence as soon as possible while vowing to continue ahead with her appeal. On September 21, she was ordered by US District Judge Miriam Cedarbaum to surrender by October 8 to begin her sentence. On September 29, the Federal Bureau of Prisons announced that Stewart would serve her sentence at the federal prison camp in Alderson, West Virginia, denying her request to serve it at the federal prison in Danbury, Connecticut. She reported to Alderson Federal Prison Camp early in the morning on October 8. Alderson is a minimum security prison, the lowest level of security in the Bureau of Prisons. There are no fences, and inmates are generally free to walk around the compound unescorted. Stewart, who said her prison nickname was "M. Diddy" http://www.salon.com/ent/wire/2005/07/05/martha_stewart/index.html, reportedly got along quite well with her fellow inmates and kept herself busy with assigned cleaning tasks. She was released on March 4, 2005 at 12:30 AM.

Related Topics:
September 15 - 2004 - September 21 - October 8 - September 29 - Federal Bureau of Prisons - Alderson, West Virginia - Danbury, Connecticut - Alderson Federal Prison Camp - March 4 - 2005

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Release and comeback

After being released from Alderson, Stewart began to serve her home confinement at her estate in Bedford, New York. During the confinement she was permitted to leave her property for up to 48 hours a week to conduct business, but was required to wear an electronic ankle bracelet to monitor her location at all times. On August 3, (her 64th birthday), Stewart's lawyers announced that her home confinement was extended for three weeks, until August 31, reportedly because she violated terms of the confinement. [CNN]

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In October, 2005, Stewart was denied entry to Canada under their "no-convicts rule" due to her status as a convicted felon. She had planned to attend a Thanksgiving festival in Nova Scotia's Annapolis Valley. Within two days of the story breaking, Stewart was granted her work visa to enter Canada and attend the festivities.

Related Topics:
Canada - No-convicts rule - Thanksgiving

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Many people predict a comeback for Stewart while others believe she will have difficulty trying to reclaim her former status as a media mogul.

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Stewart is once again involved in her Martha Stewart Living family of magazines. Offerings of her products at Kmart have been expanded and it is likely that Stewart's merchandise will also be available at Sears stores following that company's merger with Kmart. However, the most heavily promoted aspect of her attempt at a comeback is television. She will again host a daytime show simply called Martha and will appear in a new version of The Apprentice (called '). Both shows premiered in September, 2005 and both are produced by famed producer Mark Burnett. Her prime time show has reportedly been sluggish in the ratings, which some attribute to popular dislike for the opportunistic tone of the network's massive promotional campaign.

Related Topics:
Sears - Martha - The Apprentice - Mark Burnett

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In addition to television, Stewart also has reportedly been writing a book and has launched a 24-hour satellite radio network with Sirius.

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