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Thursday, February 24, 2005

Report: Martha Stewart’s Lawyers Seek Settlement of SEC Charges

CNN reported today that attorneys for Westport’s Martha Stewart may be able to negotiate a settlement with the Securities and Exchange Commission that would permit Stewart to return to the helm of Martha Stewart Living Omnimedia at some point.

The network quoted a person familiar with the situation as saying,“If she’s living straight and narrow, will the public be at risk if she became CEO again?”

The SEC has filed an insider trading case against Martha Stewart, in which it is seeking to bar her from acting “as a director of, and limiting her activities as an officer of, any public company.”

That case is separate from the federal obstruction of justice charges for which Stewart is serving a five-month prison sentence. She is due to be released next week.

Federal prosecutors did not bring insider trading charges against her in their case.

Stewart is appealing her conviction on charges she lied about her sale of ImClone Systems stock before damaging information about the biotech firm became public, as well as for obstructing an investigation into the sale. Her SEC case is on hold while her criminal appeal proceeds.

Newsweek’s online edition reported Wednesday that Robert Morvillo, Stewart’s lawyer, recently opened the negotiations by asking officials in the SEC’s New York office to consider a settlement on insider-trading charges.

The magazine reported that SEC officials told her lawyers that it would consider a settlement deal that wouldn’t require her to be barred for life from running her company.

The SEC also wants to fine Stewart and force her to give back losses she avoided through her sale of ImClone stock in the suit.

Stewart, who is still the controlling shareholder of her company, gave up her chairman and CEO titles when she was indicted in 2003.

She gave up her position on the board as well as her title of chief creative officer following her March 2004 conviction. She is now listed as the company’s chief editorial and media director.

She has not been allowed to conduct business while in prison, but she will be allowed to again be involved in business decisions after her release as she serves an additional five months of home detention in Bedford, N.Y.

There is no SEC rule stating that convicted felons may not be officers of public companies; merely a requirement that the conviction be disclosed if it could impact the company’s stock.

The SEC had no comment. Attorneys for Martha Stewart did not return calls and e-mails for comment, CNN said.

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Posted 02/24/05 at 04:27 PM  Permalink



Comments

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I’ve been sleeping so much better since they got that convicted felon, Martha Steward off the street. Now, I don’t know what I’m going to do with only a week before her release. I just don’t feel safe anymore.
Melvin Gann

Posted by Melvin P. Gann on February 24, 2005 at 10:21 PM | #
 

Martha Stewart has always been “living straight and narrow.” What a joke—“permitting” Ms. Stewart to return to “the helm of Martha Stewart Living Omnimedia at some point.” The SEC insider trading case against Ms. Stewart is a spurious case, motivated by political gains.

Ms. Stewart traded 3,928 shares of ImClone stock, amounting to less than 0.056114285% of the shares sold on that day, and received less than the closing stock price. This inconsequential personal investment sale implicated no corporate governance of her company. The SEC case is loony regularly conduct and ignominious posturing. The SEC needs to repudiate its mission of wrongful expropriation and get out of Ms. Stewart’s inspirational life.

Posted by Grace on February 24, 2005 at 10:44 PM | #
 

Clearly Grace you are an expert in securities law. Hey, it’s just a little lying and insider trading. Please let me know when you plan to sell or buy securities so I can front run your trades and make a profit. But is it only a small profit so that should not be a problem for the Martha apologists out there. BTW, of course she was singled out because she was famous. It serves as a warning to the less famous out there. Martha was convicted of a crime and now she has served her time.

Posted by Paul on February 25, 2005 at 03:22 AM | #
 

Paul is obviously misinformed and disinformed on the facts of the Martha Stewart case. Apparently, you have been bamboozled by the media frenzy and the cacophony of biased reporting spewed by the media on the case.

The irrefutable facts are there was no “lying and insider trading” by Ms. Stewart. She made a de minimus legal, personal stock trade of less than 0.056114285% of the ImClone shares that were traded based on sound investment principles that had nothing to do with her company or any illegal “insider information”, which she never possessed. You have no inkling of this because you obviously never took the time and interest to be informed. Simply, a criminal case and a civil insider trading case against Ms. Stewart were fabricated into existence for political gains.

Imprisonment and Expropriation emanating from a legal sale of less than 0.056114285% of the ImClone shares traded have the stench and immorality of Taliban justice.

Stating that “Martha Stewart was convicted of a crime and now she has served the time” isn’t justice rendered, as you may believe, but the absolute repudiation of the American system of justice as symbolized by Lady Justice.

The SEC has no genuine insider trading case against Martha Stewart; the SEC needs to get out of Ms. Stewart’s highly productive life and cease the waste of taxpayer resources.

Posted by Grace on February 25, 2005 at 05:53 AM | #
 

Grace:

I know you love Martha but she was convicted in a jury trial in front of a respected judge whom I know. She was convicted of a crime. There were no Talibans present. BTW, if you even trade 1 share on inside info, it is wrong. If you sold your imclone stock after Martha, you lost out. I guess famous people are allowed to make extra money because it is just a little bit of stock. Martha had a Series 7 at one time, so she likely knew the rules…

Posted by Paul on February 25, 2005 at 12:17 PM | #
 

Paul,I am not delusional so “love” is an irrelevant concept for this total stranger to Ms. Stewart; but I do respect and render her kudos for her entrepreneurial brilliance, visionary prescience, and iconic contributions to our culture, economy, and everyday life that see no match in any of the participants in the travesty of her criminal and civil cases.

Ms. Stewart was convicted in a kangaroo court trial that was steeped in purjury to the core. Her wrongful conviction is on appeal seeking justice. Jury trial and a respected judge have sent innocent people to death row or wrongly incarcerated them for years when they did nothing wrong and committed no crimes; Ms. Stewart’s case is no different; she did nothing wrong; she committed no crimes.

You may be convinced that the judge in Ms. Stewart’s case is “a respected judge” and therefore fair and infallible. But the judge got caught up in the frenzy of the case and gored Ms. Stewart with the unconstitutional Federal sentencing guidelines. From the perspective of Lady Justice, the sentence imposed on Ms. Stewart exposed the judge, though “a respected judge”, as morally bankrupt with values out of synch with common decency and far past her dutiful retirement.

You are in a state of denial on the facts of Ms. Stewart’s case and reflecting the biased media shilling for her mastermind persecutor, James Comey.

“Famous people” who dream big and accomplish the “Big Dream” through honest work ethic should not be a magnet in our capitalist democracy for wrongful imprisonment and expropriation. The SEC case against Ms. Stewart is simply a bogus case; the SEC needs to get out of her iconic life.

Posted by Grace on February 25, 2005 at 05:57 PM | #
 

Here here Grace you have summed it up well.This was a witch hunt by our government from the beginning.From when the investgative commitee which included Jim Greenwood,Billy Tauzin etc made the remark of this being one oy the worst cases of insider trading they have seen,thereby causing MSO stosk to plummet,they had to cover themselves because of this false statement they made so they called good ole boy John Ashcroft,to pursue her and get her on anything they could.Otherwise it would be shown how irresponsible our great leaders are. L J Smith

Posted by L J Smith on February 26, 2005 at 12:37 AM | #
 

Paul,

You are misinformed. Martha was not even charged with insider trading, let alone convicted of it.

It’s interesting to see you condemn her when you are ignorant of the basic facts of the case.

Posted by trudy on March 01, 2005 at 12:15 PM | #
 

Trudy:

Not to be nitpicky but it does not look like Paul said Martha was convicted of insider trading.

Posted by Bob on March 01, 2005 at 03:40 PM | #
 

Martha got ripped. In Oregon, a former Judge John Mabrey passed out judicial law for years and finally wound up on the Circuit Court. Then, it was disclosed that he had enrolled his not-then-wife on his county-payed-for insurance policy. Of course, when this was disclosed, he feigned innocence, another term for “flagrantly lying” and was released from his duties of the court and made to pay what he screwed the insurance company out of. Jail time - not any. Just goes to show that “public-servant-guys” will just be guys.

Posted by *delanie on March 07, 2005 at 06:07 PM | #