Martha Stewart Sentenced to 5 Months

Reuters, Jul 16, 2004

Fri Jul 16, 2004

NEW YORK (Reuters) - Martha Stewart, who built a catering company into a media empire, was sentenced on Friday to five months in prison for lying about a suspicious stock sale.

Stewart, 62, who has stepped down as an officer and board member of Martha Stewart Living Omnimedia, was found guilty in March of conspiracy, making false statements and obstruction of agency proceedings.

The judge also sentenced Stewart to two years of supervised release and ordered her to pay a fine of $30,000.

The case against Stewart stemmed from her suspicious sale of stock in biotech company ImClone Systems Inc. on Dec. 27, 2001.

Prosecutors said the sale occurred after her stockbroker Peter Bacanovic ordered an assistant to tip Stewart that ImClone founder Sam Waksal was dumping all his ImClone shares, knowing federal regulators were about to give a thumbs down to the company's anti-cancer drug.

While there were no criminal charges accusing Stewart and Bacanovic of insider trading, prosecutors said they conspired to cover up the secret tip. Bacanovic is to be sentenced later on Friday.