It really couldn't have happened to a "nicer" megalomanic, could it?
Martha Stewart Indicted
By Lia Haberman
Today on Martha Stewart Living: How to turn 41 pages of government-issued legal documents into a stunning centerpiece.
What else would you expect the lifestyle guru to do with the federal charges filed today in New York?
As expected, a federal grand jury has indicted Martha Stewart on nine counts stemming from an insider-trading scandal that could cost her big bucks or even a stint in prison.
Earlier, Stewart, impeccably outfitted in a beige trenchcoat and matching umbrella, arrived in federal court to plead innocent to all charges.
The accusations leveled at the diva of domesticity allege a "conspiracy" to obstruct justice and mislead federal investigators investigating the December 2001 sale of her ImClone shares--a day before the biotech company was to go public with stock-damaging news that the feds were giving the thumbs-down to its new cancer drug.
Peter Bacanovic, Stewart's former Merril Lynch broker, was also named in the court documents. Prosecutors allege that the broker tipped Martha off to ImClone's downward spiral after dumping shares for ImClone founder Sam Waksal. Bacanovic, too, entered a not guilty plea to all charges on Wednesday.
Waksal has already pleaded guilty to bank and securities fraud charges and is due to be sentenced next week.
If convicted, Stewart faces up to 30 years in prison and $2 million in fines.
Her attorney, Robert Morvillo, issued a statement questioning why the government waited more than a year to file charges. "Is it for publicity purposes because Martha Stewart is a celebrity? Is it because she is a woman who has successfully compted in a man's world by virtue of her talent, hard work and demanding standards?"
To which U.S. Attorney James Comey, the chief prosecutor, responded: "This criminal case is about lying--lying to the FBI (news - web sites), lying to the SEC and lying to investors...Miss Stewart is being prosecuted not because of who she is, but what she did."
As a client of Merril Lynch and a former securities broker herself, Stewart should've known better says the government.
The feds also accuse the cohorts of entering into "an unlawful conspiracy" to obstruct the feds' investigation and making false statements "to conceal and cover up" the illicit sale of Stewart's shares in ImClone.
All along, the 61-year-old media mogul has insisted she had a standing order with Bacanovic to sell if the price dropped below $60 a share, which prosecutors dub a "fictitious explanation."
Bacanovic is accused of fabricating documents to validate the sell-under-$60 order while Stewart allegedly made changes to her phone message log to change the substance of Bacanovic's original message telling her to sell the tanking stock.
Stewart is also facing a related civil suit filed Monday by the Securities and Exchange Commission (news - web sites). That action seeks to bar her from running any public company and pay the full price for shares she sold.
Tuesday, Stewart was a no-show at her company's annual shareholder meeting but in a videotaped message said that she "grievously sorry" for the controversy that has tarnished her multimillion-dollar business, including TV series, magazines, books, merchandise and a radio show, which was based on her tasteful living image.
In a January interview with The New Yorker magazine, Stewart said the whole imbroglio had cost her about $400 million in sagging sales, declining stock value and legal fees.
All in all for Martha, this is definitely not a good thing.