Martha Stewart

  1. I just read where Martha Stewart has been Indicted.

    I wonder how she will decorate her cell?? I know she will probably never see jail time, but it sure is fun to think about!!

    "LIVE!! from Sing Sing, Its Martha Stewart!!!!!"
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  2. 61 Comments

  3. by   Nurse Ratched
    I'm kinda evil that way, too .

    Seriously, tho, I *AM* glad to see people are finally being punished for white collar crimes (in theory, at least .) All that Enron/Worldcom/etc. crap that went down - how many people had their retirements devastated by this stuff? It's time we started showing that these are not victimless crimes.
  4. by   Shamrock
    Maybe they'll put her in with Leona H.
  5. by   H ynnoD
    Like OJ she'll probably buy her way out of it and she has so much more then he did...
  6. by   CardioHeather
  7. by   Mkue
    Originally posted by Nurse Ratched
    Seriously, tho, I *AM* glad to see people are finally being punished for white collar crimes
    Me too Nurse Ratched. no one should be above the Law.
  8. by   Angelica
    Too funny!! I like the Leona Helmsley roommate idea, too. I would pay to see that.
  9. by   Ted
    Behind that cute exterior lies a troll!

    And then there's Martha Stewart!

    I believe that she's only the tip of the ice berg.

    And then there's Martha Stewart!

    Wonder if we'll see more "Martha Stewarts" in the press. Don't trust big business. Never did. Never will. . . .

    But I bet her cell will be very. . . un-Martha like!


    Ted
  10. by   Mkue
    Has anyone followed the case? Does she blame her accountants? Just wondering. I'm not up to date on the legalities of her case think I'll do some searching.
  11. by   Ted
    Martha Stewart Indicted on Criminal Charges
    By KENNETH N. GILPIN

    Martha Stewart, the home-decorating mogul who to many became synonymous with impeccable taste, was indicted by a federal grand jury today on charges of securities fraud, making false statements and obstruction of justice for her handling of a personal stock trade.

    Peter Bacanovic, who at the time was Ms. Stewart's stockbroker at Merrill Lynch, was charged with obstruction of justice and perjury for his role in the affair.

    Ms. Stewart, 61, breezed into the federal courthouse in Lower Manhattan about noon today holding an umbrella that mostly shielded her from a legion of photographers gathered in the rain near the entrance.

    Prosecutors were holding a news conference this afternoon to flesh out the details of the nine-count indictment.

    The 41-page document, filed by the United States Attorney for the Southern District of New York, James B. Comey, describes events that began on Dec. 27, 2001. That was when Douglas Faneuil, an assistant to Mr. Bacanovic, informed his boss that Samuel Waksal, who at the time was chief executive of ImClone Systems, and a member of Mr. Waksal's family were seeking to sell all the ImClone shares they held at Merrill Lynch, a stake that at the time was worth more than $7.3 million.

    Federal prosecutors have said that Mr. Waksal tried to sell his shares in ImClone, a hot biotechnology company, after learning that the Food and Drug Administration was about to issue a negative report on Erbitux, a cancer drug central to ImClone's commercial viability.

    Mr. Faneuil pleaded guilty on Oct. 2 to lying to investigators about his role in the case.

    Ms. Stewart's lawyer, Robert Morvillo, said on Tuesday that his client intended to fight the charges and plead not guilty.

    Richard Strassberg, who represents Mr. Bacanovic, asserted that his client had done nothing wrong.

    Ms. Stewart is a former stockbroker who was elected a director of the New York Stock Exchange just before the scandal broke. She stepped down from that post a day after Mr. Faneuil entered his guilty plea.

    Ms. Stewart's friendship with Mr. Waksal is the nexus of investigation into her trading activities, and to the indictment announced today.

    In the wake of Mr. Waksal's order to sell his ImClone shares, the indictment alleges, Mr. Bacanovic directed Mr. Faneuil to tell Ms. Stewart that Mr. Waksal was unloading his stock.

    Ms. Stewart was traveling when Mr. Faneuil placed his call, but, according to the indictment, he left a message that said, "Peter Bacanovic thinks ImClone is going to start trading downward."

    A little more than three hours later, at 1:39 p.m. on Dec. 27, 2001, Ms. Stewart spoke to Mr. Faneuil. Upon learning that Mr. Waksal was selling his ImClone shares, prosecutors said, Ms. Stewart told Mr. Faneuil to sell her holdings in the company, which amounted to just under 4,000 shares. The stock was sold within minutes, yielding Ms. Stewart gross proceeds of about $228,000.

    "As a client of Merrill Lynch and as a former securities broker, Martha Stewart knew that information regarding the sale and attempted sale of the Waksal shares had been communicated to her in violation of the duties of trust and confidence owed to Merrill Lynch and its clients," the indictment states.

    Mr. Waksal has pleaded guilty to charges of securities fraud stemming from his sale of ImClone stock in the waning days of 2001. He is to be sentenced next week, and faces up to seven years in prison.

    The stock sales occurred just days before ImClone disclosed that its application to the F.D.A. for approval of Erbitux, its promising cancer drug, had been rejected because of deficiencies in the company's data.

    Earlier this week, a new study concluded that Erbitux is effective against cancer.

    Ms. Stewart created Martha Stewart Living magazine in 1990 in partnership with AOL Time Warner's publishing division. She bought out her stake in 1998. At the time, the magazine had annual sales of $180 million. Martha Stewart Living Omnimedia sold shares to the public the following year.

    Ms. Stewart retained control of the company by keeping all Class B shares, which have 10 votes each, while selling Class A shares, with one vote per share, to the public.

    For a time, the bull market that was raging when the company went public pushed Ms. Stewart's wealth on paper to more than $1 billion.

    But in the last three years, her fortune has greatly shrunk, especially in the last year, after reports of her legal troubles surfaced. The stock has lost nearly half its value in the last 52 weeks.

    Shortly after news of the indictment was made public, Martha Stewart Living Omnimedia shares were trading at $9.56, up 4 cents. In the past year, the stock has sunk as low as $5.26.

    The investigations have cost the New York-based company millions of dollars in legal fees and driven away advertisers and consumers. The soft economy, which has had an adverse impact on advertising revenue throughout the publishing industry, has been an additional problem. So too have been the problems of Kmart, Martha Stewart Living Omnimedia's main merchandising partner.

    Martha Stewart Living Omnimedia includes magazines, a television show, newspaper columns, Internet marketing and the Martha Stewart Everyday line of home products. The company reported sales of $295 million last year.

    But the company lost money for the first time in the fourth quarter of last year, and posted another losing quarter at the end of March. Executives at the company have said they do not expect the business to improve until the investigation is resolved.

    Ms. Stewart built her reputation as an authority on cooking and entertaining with the 1982 publication of "Entertaining," a best-selling coffee-table book featuring recipes and photos of her renovated farmhouse in Westport, Conn. Since then, she has been the author of more than 40 books on a wide range of topics related to the home and entertaining.

    As of early this afternoon, it was not clear if Ms. Stewart would step down as chairwoman and chief executive of Martha Stewart Living Omnimedia. According to the company's most recent proxy statement, she could be forced to step down if convicted of a felony.
  12. by   Mkue
    wow, thanks Ted. That was quick
  13. by   Ted
    Originally posted by mkue
    wow, thanks Ted. That was quick
    :chuckle :roll :chuckle

    I'm real quick with the article sharing! The New York Times is my browser's home page!

    Peace to you, mkue!:kiss

    Ted
  14. by   colleen10
    MKue - I haven't been following this too too closely but I keep an ear out for any news on the subject. I think the jist of all of this is that she is being indicted for accepting insider trading information from the President of ImClone and sold her stock in the company before it tanked. The President knew that news reports would come out saying that a new Cancer fighting drug they were developing would not be accepted for testing by the FDA and therefor the value in the company and stock would greatly decrease.

    All along she has denied that she received inside information and that she had an order with her stock broker that if the stock went below $60.00 a share it was to be sold.

    However, this week with news of her indictment there are reports that her stock broker is denying her story. That there never was an order to sell at $60.00/share and that Martha called him and told him to sell the stock the very same day that she got a call from the Pres. The very next day after selling the stock it tanked.

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