As expected, decor diva and media-empire builder Martha Stewart was indicted
Wednesday by the Securities and Exchange Commission on charges of securities
fraud.
Separately, the U.S. attorney for the Southern District of New York obtained
a criminal indictment for false statements and obstruction of justice.
Both indictments stemmed from allegations of insider-stock trading in biotech company
ImClone Systems Inc.
Also charged was Stewart's one-time broker, Peter Bacanovic, who was at
Merrill Lynch & Co. when the scandal broke last year.
James Comey, the U.S. Attorney for the Southern District of New York, said of
his criminal case that it was "about lying, lying to the FBI and lying to
investors."
For the SEC's part, director of enforcement Stephen Cutler said, "The
commission simply cannot allow corporate executives or industry professionals to
profit illegally from their access to nonpublic information."
Stewart resigned from the chairman and CEO posts at Martha Stewart Living Omnimedia Inc. (MSO) Wednesday.
In addition to civil monetary penalties, the SEC wants to bar Stewart from
the board of any public company and to limit her activities as an officer.
MSO stock closed at $10 per share Wednesday, up a little over 5% from Tuesday's close
of $9.52.
