Thursday, June 05, 2003
Martha Stewart and Her Broker Indicted and Plead Not Guilty
It was all-Martha-all-the-time coverage on the cable news networks today as Westports latest and most famous possible federal prisoner pleaded innocent to federal charges stemming from her insider-trading scandal.
Hours later she stepped down as chief executive of her company but said she would remain on the board, but not as chairman.
“I love this company, its people and everything it stands for, and I am stepping aside as chairman and CEO because it is the right thing to do,” Stewart said in a brief statement.
A 41-page indictment unsealed in Manhattan federal court charged Stewart with securities fraud, obstruction of justice, conspiracy and making false statements to prosecutors and the FBI.
The indictment also charged Peter Bacanovic, Stewart’s stockbroker, with perjury and obstruction of justice, among other charges. He also pleaded innocent to all charges.
As the expectation increased that this would be indictment day for her, media representatives descended on Westport asking residents what they thought.
A private security guard maintained a vigil at Stewart’s Turkey Hill Road South home.
U.S. District Judge Miriam Goldman Cedarbaum released Stewart and Bacanovic without setting bail until their next hearings. The judge ordered Stewart to notify authorities three days ahead if she planned to leave the country.
Stewart has denied wrongdoing in her December 2001 sale of shares of ImClone Systems Inc. ahead of an unfavorable government ruling. She said she had an arrangement with her broker for the automatic sale of the stock when it dropped to a certain price.
Manhattan U.S. Attorney James Comey said the case centered on Stewart’s lies to the FBI, the Securities and Exchange Commission and investors.
“That is conduct that will not be tolerated,” Comey said at a news conference. “Miss Stewart is being prosecuted not because of who she is, but what she did.”
Meanwhile, the SEC filed a civil suit in Manhattan seeking to bar Stewart from being in charge of any public company.