Martha Stewart attends the Central Park Conservancy Annual Gala
(Photo Credits: Sean Zanni | Patrick McMullan via Getty Images)
Martha Stewart was a highly successful entrepreneur, a renowned author, and a celebrity homemaker when she was indicted and sentenced to prison in 2004. The charge was related to lying about a stock trade. In December 2001, Stewart allegedly stole her stake at ImClone Systems, which was a biopharmaceutical company. When authorities questioned Stewart and her stockbroker Peter Bacanovic about the sale of the stakes, they claimed that it was based entirely on public information, People Magazine reported. She avoided a loss of $51,000 because of the last-minute sales.
CBS News reported that Martha Stewart sold away ImClone Systems stocks worth $228,000 on December 27, 2001. On the very next day, the Food and Drug Administration rejected ImClone’s application for the approval of a cancer drug. This had a bad effect on the company’s share values. Prosecutors claimed that Stewart had been informed by her broker that Sam Waksal, ImClone’s CEO, had himself been trying to sell off his stakes at the company, and that is what prompted the same from Stewart. The court sentenced Waksal to seven years in prison for insider trading. He admitted to authorities that he got information about the Food and Drug Administration’s decision even before it was official.
However, federal prosecutors’ investigation revealed that Stewart and her broker had some inside information that prompted the sale. This also meant they lied to government officials about the stock trade, initiating an indictment against them. In 1999, Martha Stewart reportedly went public with her media empire, the Martha Stewart Living Omnimedia, subsequently becoming the first self-made female billionaire in the United States.
How much prison time did Martha Stewart get?
The trial that ended in Martha Stewart’s conviction was reportedly highly public and became a pop culture phenomenon. Both criminal and civil charges were filed against her. Bacanovic and Stewart were accused of committing security fraud by participating in illegal insider trading. They were charged with nine counts of security fraud, obstruction of justice, and lying to federal prosecutors. The television personality, whose work mostly revolved around her cooking and decorating skills, was found guilty on all charges. These included conspiracy and obstruction of justice alongside her broker.
CNN reported that Martha Stewart was sentenced to 5 months in prison. She was also asked to pay a fine of $30,000 after the conviction and be subject to two years of probation post-release, which included 5 months of home confinement. Her sentence was reportedly the lightest that was possible under federal guidelines. Bacanovic was also sentenced to the same amount of prison time and asked to pay $4000.
The New York Times reported that the conviction led to the removal of her title. Also, Stewart was asked to step down from the position of director to the company that she herself founded.
The home confinement that would follow the prison sentence also included several guidelines. Martha Stewart was to remain at home for one whole day at least once a week. She would be allowed to go out to work for 48 hours a week. The 48 hours would also accommodate other approved activities. The share values in her company, Martha Stewart Living Omnimedia, reportedly shot up by 37 percent on the day when the sentencing happened. However, the share prices were still lower than where they were before the news that her stock sales had been under investigation.
What happened to Stewart after her release from prison?
After the sentencing, Stewart reportedly referred to the affair as a “small personal matter” that blew up to this extent, as per a report by The Washington Post.
Martha Stewart reportedly bounced back to success in her television career almost immediately after her release from prison in March 2005. She was seen on television again in September 2005. That is when she launched The Martha Stewart Show and The Apprentice: Martha Stewart. The first was a daytime talk show that was far more successful than the latter. It was on television from 2005 to 2012 and reportedly won three Emmys.
According to The Independent, Martha Stewart claimed that her biggest regret concerning her prison time and conviction was that she was asked to host Saturday Night Live. However, her probation officer denied her permission. The report also revealed that Stewart was offered a lighter sentence during her trial in exchange for naming others involved in unfair trading practices. However, she reportedly chose to forgo the chance, and rapper Snoop Dogg commended that.
In 2015, Martha Stewart sold her multi-million dollar company for $353 million. After her release, she also published 43 books and started a line of CBD products. In May 2023, she appeared on the cover of a sport-illustrated Swimsuit issue, making her the oldest woman to appear on such a cover. She was 81 years old at the time.
The Many Lives of Martha Stewart is a CNN original series that aired on January 28, 2024 and February 4, 2024. It has two episodes airing on each day on CNN.
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