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Martha Stewart Gets Five Months, Plans Appeal

Sentenced for Lying About a ImClone Stock Sale

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Martha Stewart was sentenced by a federal judge to serve five months in prison, but the domestic diva will not have to attempt living graciously behind bars anytime soon.

After her sentencing Friday, July 16, 2004, her attorneys announced they would be appealing her conviction. Stewart will continue to be free on bail until the appeals process is complete, which could take up to two years.

In a statement after Judge Miriam Goldman Cedarbaum of U.S. District Court sentenced her to five months in prison, followed by five months in home confinement and pay a $30,000 fine, Steward made a statement in which she said she regretted that "a small personal matter" had been blown out of proportion. She expressed regret for employees of her company, Martha Stewart Living Omnimedia Inc., who have been hurt by her legal entanglement.

But was it a "small personal matter?"

In March, a jury found Stewart guilty of conspiracy, making false statements and obstruction of agency proceedings stemming from a sale of stock in biotech company ImClone Systems Inc. in December 2001.

Prosecutors claimed the sale order was placed after she learned from her stockbroker, Peter Bacanovic, that ImClone founder Sam Waksal was selling all his shares. Waksal allegedly starting selling off his stock after learning that federal regulators were about to turn down an anti-cancer drug created by ImClone.

Stewart, however, was never charged with insider trading, all her charges were related to covering up information concerning the stock trade and obstructing the investigation.

No Small Personal Matter for Some

Meanwhile, Waksal was sentenced to seven years in prison for insider trading, while Bacanovic was also sentenced to five months in prison on the same day Stewart was sentenced.

Some observers have commented that it was Martha herself who allowed the situation to become blown out of proportion. If she had owned up to the stock tip from her broker and cooperated with investigators from the beginning, chances are no charges would ever have been filed, they say.

When Stewart sold her ImClone stock when she did, she avoided losing about $60,000, when the stock price later tumbled. For someone who is worth millions, $60,000 may seem like a "small personal matter" indeed. But when she sold her stock, other investors bought it, and they were the shareholders who lost the $60,000 when the price later crashed.

It is unlikely that those investors considered the situation a small personal matter.

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