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Martha Stewart Settles with the Feds

Having been previously found guilty of falsifying her testimony to federal authorities investigating the 2001 sale of her ImClone Systems Inc. stock, it has been announced that home-life guru Martha Stewart has consented to pay $195,000 to conclude the insider trading probe being conducted by the U.S. Securities and Exchange Commission (SEC). As part of the deal and according to SEC, Stewart will be banned from holding the position as director of any public company for five years.

As long as her position is not related to financial reporting or legal compliance, Stewart thanks to the agreement will still be allowed to work as a company officer. Bruce Karpati, an assistant director in the SEC`s enforcement division, said "This case sends a strong message that the commission will not tolerate insider trading, especially where brokers tip their clients with confidential information that company insiders are selling their shares.`` The SEC has also ended its investigation of Peter Bacanovic, who was Stewart`s Merrill Lynch broker. Bacanovic must pay $75,000.

Following the announcement of the deal, Martha Stewart e-mailed a statement to the press saying it (the SEC compromise) "brings closure to a personal matter and my personal nightmare.`` On Dec. 27, 2001, Mr. Bacanovic had illegally informed Stewart that ImClone Chief Executive Officer Samuel Waksal and his daughter were disposing of their ImClone shares, with this warning in hand, Stewart was then able to escape losing $45,673?and for the trouble that she went to, Stewart was later found guilty of obstruction of justice, and was forced to serve five months in prison and following that another five months of house arrest.