NEW YORK (AP):
WELL-KNOWN American celebrity homemaker Martha Stewart was convicted yesterday of obstructing justice and lying to the government about a superbly timed stock sale, a devastating verdict that probably means prison for the woman who epitomises meticulous homemaking and gracious living.
Stewart was found guilty of conspiracy, making false statements and obstruction of justice. The charges carry up to 20 years in prison, but she will most certainly get much less than that under federal sentencing guidelines. Her ex-stockbroker, Peter Bacanovic, 41, was convicted on charges that included conspiracy, perjury and obstruction of justice, but was acquitted of making a false statement.
The jury of eight women and four men reached the verdicts on the third day of deliberations in the case.
Trading in her company, Martha Stewart Living Omnimedia, was halted after the verdict. Earlier the stock shot up on word of a verdict.
The charges centred on why Stewart dumped about US$228,000 worth of ImClone Systems stock on December 27, 2001, just a day before it was announced that the Food and Drug Administration had rejected ImClone's application for approval of a cancer drug. The announcement sent ImClone's stock plummeting.
Stewart and Bacanovic claimed they had a standing agreement to sell when the price fell below $60. But the Government contended that was a phoney cover story and that Stewart sold because she was tipped by her broker that ImClone CEO Sam Waksal was frantically trying to dump his own holdings.
Waksal later admitted selling his stock based on advance word of the FDA decision. He is serving seven years in prison for insider trading.
