WASHINGTON – Martha Stewart will pay about $195,000 and cannot serve as the director of a public company for five years under a settlement announced Monday on civil insider trading charges with the Securities and Exchange Commission.
Under the settlement, the founder of a multimedia empire dedicated to stylish living agreed to pay a total of about $195,000 relating to losses the government said she avoided on her sale of ImClone Systems Inc. (IMCL) stock in December 2001.
Stewart sold ImClone shares a day before the Food and Drug Administration announced it had declined to review ImClone's application for its cancer drug Erbitux. The stock fell about 16 percent in the wake of that FDA announcement.
She also agreed to an injunction barring her from being a director of a public company for five years.
Her broker Peter Bacanovic agreed to pay a penalty totaling about $75,000, the SEC said Monday. In a previous order, the SEC barred Bacanovic, a former Merrill Lynch employee, from associating with a broker, dealer or investment adviser.
Stewart is the founder of Martha Stewart Living Omnimedia Inc. (MSO). Its shares rose 12 cents to $17 in morning trading on the New York Stock Exchange.