posted on July 16, 2004 02:50:31 PM new
NEW YORK (Reuters) - Celebrity homemaker Martha Stewart (news - web sites) was sentenced on Friday to five months in prison and five months of house arrest, the lightest term allowed by law, for lying about a stock sale -- and vowed to make a comeback.
Her former stockbroker, Peter Bacanovic, drew the same term for conspiring with her.
Speaking in a shaking voice before the sentencing, Stewart made a brief plea for leniency to U.S. District Judge Miriam Goldman Cedarbaum, who could have given the 62-year-old businesswoman 16 months behind bars.
The judge recommended a minimum security federal prison in Connecticut, not far from one of Stewart's posh homes, and ordered two years' of supervised release and a $30,000 fine. But Stewart does not have to surrender until an appeal is decided.
"Today is a shameful day," said Stewart, who built a catering company into a media and merchandise empire of lifestyle magazines, cookbooks and television shows. "I ask that in judging me, you remember all the good I've done."
Clad in a dark pantsuit, Stewart looked upset as the judge read the sentence but quickly regained her composure and kissed her daughter and her sister. She told reporters in the courtroom she was not surprised "at all" by the sentence.
The judge said she chose the minimum sentence because Stewart had no criminal record and she believed the defendant had "suffered and will continue to suffer enough."
"The sentence I have just imposed is, in my opinion, the minimum permitted under current law," the judge said. "I have not lost sight of the seriousness of the offense of which you have been convicted. Lying to government agencies during the course of an investigation is a very serious matter."
Outside, Stewart declared she would make a comeback.
"I'll be back. Whatever I have to do in the next few months, I hope the months go by quickly," she said. "I'm used to all kinds of hard work, as you know, and I'm not afraid."
She called the case "a small personal matter" that was blown out of proportion with "venom."
Stewart was found guilty in March of conspiracy, making false statements and obstruction of agency proceedings -- all stemming from her suspicious sale of stock in biotech company ImClone Systems Inc. (Nasdaq:IMCL - news) on Dec. 27, 2001.
Prosecutors said the sale occurred after Bacanovic ordered an assistant to tip Stewart that ImClone founder Sam Waksal was dumping all his shares, knowing federal regulators were about to give a thumbs down to the company's anti-cancer drug.
Bacanovic, 41, was convicted of conspiracy, making false statements, perjury and obstruction of justice. Cedarbaum sentenced him to five months in prison, five months of house arrest, two years' supervised release and a $4,000 fine. He too does not have to surrender pending appeal.
While there was no case made for insider trading, prosecutors said she and her broker lied to cover up the tip.
The ensuing debacle wiped off $400 million in market capitalization, or nearly half, in Martha Stewart Living Omnimedia (NYSE:MSO - news), the company she founded.
But news of the sentence sent Martha Stewart shares up $2.95 at $11.59 in late trade on the New York Stock Exchange (news - web sites). Earlier they hit $12.00, the highest since her conviction.
"People like her, and they're happy she won't spend too much time in prison," said management consultant Peter Cohan.
Indeed, Stewart was greeted outside by supporters like Pat Turner, a Georgia resident who planned a trip to New York to coincide with the sentencing.
"I think she'll take this and turn it into a positive, hold her head high," Turner said. "I think she'll come back and be bigger and better because that's the kind of person she is."
Stewart has enjoyed remarkable support from fans, especially compared with more reviled white-collar criminals who are seen evading justice through wealth and influence.
The judge said she received more than 1,500 letters from Stewart supporters, who also set up fan clubs and Web sites and even petitioned President Bush (news - web sites) to step in.
Stewart asked to serve house arrest in her home in suburban Bedford, New York, where she would wear a monitoring device. (Additional reporting by Herb Lash)
posted on July 16, 2004 05:21:53 PM new
I never quite understood the big deal here. Her stockbroker called and advised her to sell some stock, which she did. If the information was illegal, shouldn't the BROKER be the one going to jail?
I'm no fan of Martha, but I think this was a witch-hunt. Yeah, pun intended!
--------------------------------------
We do not stop playing because we grow old. We grow old because we stop playing -- Anonymous
posted on July 16, 2004 05:29:27 PM new
I think they just wanted to make an example of a wildly successful woman. I'm no fan of hers either, but I think she got a raw deal.
posted on July 16, 2004 06:02:09 PM new
She was a broker before she was "Martha Stewart". Granted, the broker threw this her way but she had to have known that was insider information or very much lookin like something illegal. She didnt get any raw deal. 5 months which may wind up being home detention is a cake walk. The only thing is that her business took a big hit from it and that was probably why it was a lenient sentence. She paid for her slight indiscretion, imo. But I bet if she were not famous it would have been alot worse.
I think we Americans expect our rich and privileged to get off easy.
ed to add:
and 30k to her wealth is peanuts!
--------------------------------------------
[ edited by neroter12 on Jul 16, 2004 06:36 PM ]
posted on July 16, 2004 06:10:16 PM new
Not enough time. Should have gotten more just for her condecending attitude,
"The natural family is a man and woman bound in a lifelong covenant of marriage for the purposes of:
*the continuation of the human species,
*the rearing of children,
*the regulation of sexuality,
*the provision of mutual support and protection,
*the creation of an altruistic domestic economy, and
*the maintenance of bonds between the generations."
posted on July 16, 2004 06:36:08 PM newShe was a broker before she was "Martha Stewart". Granted, the broker threw this her way but she had to have known that was insider information or very much lookin like something illegal. She didnt get any raw deal. 5 months which may wind up being home detention is a cake walk. The only thing is that her business took a big hit from it and that was probably why it was a lenient sentence. She paid for her slight indiscretion, imo. But I bet if she were not famous it would have been alot worse.
realplay: insider trading is illegal in case you dont know! lol
Um... just in case nobody noticed, Martha Stewart was not convicted of any stock market infractions. She was convicted of lying to investigators who were looking into possible inside trades, but she was never charged. In other words, she lied about a crime nobody ever officially accused her of comitting. I wonder just what percentage of the American public still thinks she's guilty of stock manipulation...? What a pathetic waste of public money.
___________________________________
Beware the man of one book.
- Thomas Aquinas
Martha Stewart was used as a sacrificial lamb to publicize the lie that corporate criminals are being prosecuted. It will be interesting to see what happens to "Kenny Boy".
posted on July 16, 2004 06:42:08 PM new
You know what profe? I was waiting for somebody to bring that up. But what she tried to accomplish is tantamount to the very same thing! She tried to dump her shares before the stock plummeted because she knew - she got a tip it was going down. Same thing. Big deal on the wording.
And they all do it on wall street. But few get caught. - Didnt anybody see the big collective sigh of relief today: her stock went up!
posted on July 16, 2004 06:45:13 PM new
profe I agree.......
This will only be a minor setback for her as the public will still buy her products and watch her on TV. K Mart I doubt will suffer much as if you go into their store, at least where I live, their store is neat and orderly. Service is friendly. Prices good.
posted on July 16, 2004 07:13:03 PM new
Martha Stewart was not charged with insider trading. She was charged with and found guilty of lying to Federal Investigators.
Insider trading is a crime that may be handled in criminal courts or thru negotiations with the SEC. In the latter case, the perpetrator is usually forced to give up any profits made and pay a hefty fine as well, all as part of a consent agreement, tantamount to a no-contest plea.
Insider trading is NOT a crime though, if you are the son of the sitting President of the United States (George H.W. Bush)even though an SEC investigation proves that you are guilty of violating those rules. Likewise, failure to report your insider trading as required by law, again confirmed by an SEC investigation, leads to no legal action being taken. Finally, none of these actions will in any way hamper you from being nominated for the presidency, or in this particular case, having political allies on the Supreme Court awarding you the Presidency in the event you are unable to actually WIN the election legitimately.
Martha Stewart's problem was not being the daughter of a President.
posted on July 16, 2004 07:24:24 PM new
well put bob. Some like to conveniently forget that Bush ignored federal regulations by failing to file insider stock trade reports on time, he even went so far as to back-date one trade by four months....
___________________________________
Beware the man of one book.
- Thomas Aquinas
posted on July 16, 2004 08:07:24 PM new
oh please, she was innocent as a little child, then, right? Thats why she erased the message then put it back and She lied to investigators.
Hey, I like her. I think she offers the world to consumers. But she made a mistake. whether it was a momentary lapse in judgement under pressure or a well thought out move...she made a mistake. She could at least be a little humble about it.
Now....you all jump on linda about Clinton in a Bush thread! Whats bush doing in a martha stewart thread?
posted on July 16, 2004 08:13:34 PM new
IIRC, she was actually charged with lying about not lying. Seems she pleaded not guilty, and that was seen as a Bad Thing. And here we alsways thought it was 'innocent until proven guilty.'
And do you notice how, with all the hoopla about Stewart, the real villains that are on trial didn't get all that much mention? The person who said Stewart was a sacrificial lamb was right.
And tell me, if your broker called you and said you should get out of something you have holdings in because it was going into the toilet, what would you do? I really don't think any of us would stand there saying "oh, no, I can't do that--I'll just go ahead lose a lot of dough!"
____________________
We are not afraid to entrust the American people with unpleasant facts, foreign ideas, alien philosophies, and competitive values. For a nation that is afraid to let its people judge the truth and falsehood in an open market is a nation that is afraid of its people. -- John F. Kennedy
posted on July 16, 2004 08:18:16 PM new
Youre right bunni. But on wall street when they start investigating who got out right before the stock tumbled and find out why....thats a no-no!
posted on July 16, 2004 08:33:37 PM new
Here's some info many might not be aware of
Inside Information
Background and Definition
U.S. Federal and State securities laws and
laws of certain other countries make it
unlawful for anyone in possession of nonpublic material information to take advantage of such information in connection with purchasing or selling securities or
recommending to others the purchase or sale
of securities. Such information must not be
disclosed to others who may, thereafter, take advantage of it in purchasing or selling securities.
posted on July 16, 2004 08:40:31 PM new
In actuality she was sentanced for her stupidity.
She had the option of not talking to the investigators until represented by an attorney.
Why the hell did she talk to the investigators without her attorneys present? Because she thought she could outsmart them.
Well look who was outsmarted.
"The natural family is a man and woman bound in a lifelong covenant of marriage for the purposes of:
*the continuation of the human species,
*the rearing of children,
*the regulation of sexuality,
*the provision of mutual support and protection,
*the creation of an altruistic domestic economy, and
*the maintenance of bonds between the generations."
posted on July 16, 2004 08:52:22 PM new
Bear, I actually have every confidence she will bounce back and maybe better than ever with this whole new perspective on her life.
She's not infallible but is a pretty tough cookie. Providing her name holds up, she will bring that business back up. People like her and what she offers them. I dont think it was a fluke she was successful.
posted on July 16, 2004 09:27:17 PM new
My understanding of her sentencing is that she gets 5 months in jail, 5 months under house arrest with ankle bracelet (her choice of houses), and then 2 years' probation. But she remains free until alllllll her appeals are denied or whatever.
I wonder if she'll chat with other women in prison, maybe talk to them about their lives.
Martha is brilliant, and I admire most of what she has accomplished, although she lost me when she told us how to Make Our Own Marshmallows! Yikes! She's like some other famous women in the public eye who have a hard streak to them and whom I wouldn't particularly want to be good friends with. But I guess we'll have real equality when women can also be stern and forbidding, the way a lot of successful businessmen have been, and we all take it for granted. I think we all want women, no matter how they've risen in the world, to be like our best friends. Ain't gonna happen.
___________________________________
"Our dilemma is that we hate change and love it at the same time; what we really want is for things to remain the same, but better."
- Sidney J Harris
posted on July 16, 2004 11:28:02 PM new
"Martha Stewart was used as a sacrificial lamb to publicize the lie that corporate criminals are being prosecuted."
Another stupid statement. Ask any broker. She was prosecuted because her broker had inside info which was used to sell her stock at X dollars a share. They then pushed that stock the next day to lots of little people. At the end of the day, it was worth 1/10th X.
The Feds watch for stuff like this like hawks and come down HARD whenever it happens.
posted on July 16, 2004 11:38:41 PM new
This is rich......Poor little Martha. so persecuted & abused. And she compares herself to Nelson Mandela
--------------
"In an interview with Walters before her trial, Stewart had said she was afraid of going to prison. In today's interview she said she had prepared herself for the possibility, but said she hasn't given much thought to what life might actually be like in a federal prison.When asked how she would handle prison food, fellow inmates and strip searches, she said, "I could do it … I'm a really good camper. I can sleep on the ground.… If it is looming ahead of me, I'm going to have to face it, and take it and do it and get it over with. And there's many other people that have gone to prison. Look at Nelson Mandela."
Stewart said she was frustrated that a public perception persists that she was involved in an insider-trading scandal. Stewart was not even accused of insider trading, but of lying to investigators and conspiring with her stockbroker Peter Bacanovic to cover up a suspicious sale of ImClone stock two years ago. In March a jury found her guilty on all counts — conspiracy, making false statements and obstruction of justice.
"The natural family is a man and woman bound in a lifelong covenant of marriage for the purposes of:
*the continuation of the human species,
*the rearing of children,
*the regulation of sexuality,
*the provision of mutual support and protection,
*the creation of an altruistic domestic economy, and
*the maintenance of bonds between the generations."
posted on July 17, 2004 04:54:47 AM new
i agree with neuroter,she is going to do well from now on.
There is probably a Martha Stewart support group and fan club waiting for her in jail.
She will be hosting Martha sessions and advising and coaching other inmates,it would be stupid not to take advantage of her knowhow free .After she gets out of jail,she will have a bigger name than Hilary who,go on talk shows,write memoirs,champions woman rights and sell more of her products.
Who needs Kmart .
She may even run for the white house.
-sig file -------we eat to live,not live to eat.
Benjamin Franklin
posted on July 17, 2004 06:36:17 AM new
Stop, thats why I said in my original post (when she first got indicted) that broker threw her a hot potato. But her being Martha Stewart, she will take it and make 5 million dishes out of it!! :-0\
posted on July 17, 2004 09:10:16 AM new
Ironic that Martha lied to investigators and gets 6 months over this. Yet, George Bush, Dick Cheney, Donald Rumsfeld, Colin Powell, etc. have lied repeatedly to investigators, the American public, the world... and yet they are not punished.
Sounds pretty fair if you ask me. I like Logan's comment about her being out by the time she decorates her cell. She is probably going to appeal the decision.
posted on July 17, 2004 09:11:07 AM new
desquirrel said:
"The Feds watch for stuff like this like hawks and come down HARD whenever it happens"
Unless your name is George W. Bush and your daddy is President of the United States at the time.
In this case, an SEC investigation that concludes that you ARE guilty of insider trading AND failure to report insider trades on a timely basis AND falsifying those reports when submitted months after the fact is filed and forgotten.
posted on July 18, 2004 05:37:02 AM new
1300 inmates at Danbury have been following her trial closely.
-sig file -------we eat to live,not live to eat.
Benjamin Franklin
