Sun, Jul 18, 2004 - Page 7 News List

Stewart gets five months


A supporter of Martha Stewart stands outside the New York City courthouse during the sentencing phase of Stewart's conviction over a stock-trading scandal on Friday.


A defiant Martha Stewart, the disgraced American doyenne of design, emerged from court on Friday vowing to make a comeback despite being sentenced to five months in prison for lying about an illicit share deal.

"Today is a shameful day," she said outside court. "It is shameful for me and for my family and for my beloved company."

Stewart, 62, whose blond bob and schoolmistress demeanour are known across the country from her magazines and TV empire, was also fined US$30,000 and ordered to spend a further five months under house arrest in one of her many homes. She has picked her palatial mansion in Bedford, New York.

News of the sentence, which was more lenient than legal experts had expected and which was postponed while she appeals, sent shares in her company Martha Stewart Omnimedia rocketing.

Not one to pass over a chance for self-promotion, Stewart took advantage of the TV crews gathered outside the Manhattan court to plug her magazines and Web site.

"Whatever happened to me shouldn't have any effect whatsoever on the great company Martha Stewart Omnimedia," she said. "I'll be back, I will be back."

Stewart was convicted on March 5 of lying about selling shares in a cancer drug company, ImClone, in December 2001, the day before the Federal Drug Administration (FDA) refused to clear one of its products, news that sent its share price plummeting. She was found guilty of two charges of making false statements, one of obstructing justice and one of conspiracy. The more serious charge of securities fraud -- that she had tried to maintain her own company's stock price by lying about her dealings elsewhere -- was dismissed by the judge during the trial.

Her case has divided the nation. Some see her plight as the vindictive hounding of a rich and powerful woman while others believe it will serve as an important lesson to the rich that they will no longer be allowed to get away with white-collar crime.

Her supporters say that because the original and more serious charge of securities fraud was dropped, Stewart has been convicted of lying about something that was not technically illegal. But for many Americans her sentencing will be a victory in the wake of corporate collapses such as that of Enron and stories of executive greed that have emerged since the end of the dotcom boom. Yesterday, dressed in a black suit, she appeared to be close to tears while being sentenced by Judge Miriam Cedarbaum. But by the time she emerged, her demeanour was more that of a Wall Street banker than a convicted felon.

She said a "small personal matter" had been "blown out of all proportion and with such venom and such gore it's just terrible."

She stopped short of apologizing for her actions, saying only that she was sorry it had plunged her company, which she was forced to leave when convicted in March, into chaos and caused the loss of 200 jobs.

Although she has lost her syndicated newspaper columns and her TV show was taken off the air by one of the big networks, institutional investors were yesterday said to be buying back into Martha Stewart Omnimedia and shares gained almost 20 percent.

Her short jail term and the fact that during her house arrest she will be able to spend 48 hours a week outside her house mean she will not be out of action for long.

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