For what offense did Martha Stewart go to jail?

Martha Helen Stewart (born August 3, 1941) is an American retail businesswoman, writer, and television personality. As founder of Martha Stewart Living Omnimedia, she gained success through a variety of business ventures, encompassing publishing, broadcasting, merchandising and e-commerce.

In December 2001 she became involved in an "insider trading" scandal that led to Martha Stewart being sentenced to five months in prison. Interestingly, she was not jailed for the insider trading itself.

Insider trading is where an individual buys or sells stocks they have in a company using information that is not available to the public. Insider trading is illegal and a serious offense resulting in fines or jail time.

According to the U.S. Securities and Exchange Commission (SEC), Stewart avoided a loss of $45,673 by selling all 3,928 shares of her ImClone Systems stock on December 27, 2001, after receiving material, nonpublic information from Peter Bacanovic, who was Stewart's broker at Merrill Lynch. The day following her sale, the stock value fell 16%.

In the months that followed, Stewart drew heavy media scrutiny, including a Newsweek cover headlined "Martha's Mess". Notably, on June 25, 2002, CBS anchor Jane Clayson grilled Stewart on the air about ImClone during her regular segment on The Early Show. Stewart continued chopping cabbage and responded: "I want to focus on my salad."

More Info: biography.yourdictionary.com

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138 Comments

Betty Gitlin-Rich

I don't say Martha did a good thing. But it seems rather unbalanced that some people/banks/investors on wall street rigged the system which caused the crash in 2008 and required bailouts and not one of them went to jail.

John Bassemier

So why is insider trading legal for our senators and congressmen?

Ken Riehl

I believe that she was actually sent to prison for lying to the SEC about her possible involvement in insider trading...

Sandi Collins-Reynolds

Martha Stewart did not go to prison for insider training. She went for giving false statement, or lying, when she was questioned by the authorities.

Joe Adamo

She was punished harder because she was a high profile person.

pnazey

Martha served her time and remains an amazing woman.

Robert W. Jankowski

Umm, you folks need to do a bit more research before publishing erroneous information. Martha Stewart was never even charged with "insider Trading". She was charged and convicted of conspiracy, obstruction of justice and two counts of making false statements. Yes, these charges were brought after she and her ex-broker lied to the government concerning the sale of of more than 3,900 shares of ImClone Systems stock, worth about $250,000, in December 2001. Just as gangster Al Capone was ultimately convicted on tax evasion after years of attempts to bust him for murder, racketeering, bootlegging, gambling, and several other mob related crimes which the prosecutors were never successful at getting a jury to convict him. They found a loophole and sent him to Federal prison, effectively ending his gangland career.

Sandra Gibson Mackey

Ken Riehl, you are right. I missed this one because "lying" was not a possible answer. She was not convicted of insider trading. She was convicted of lying to the SEC.

Donna Lee

I really don't think she realized what was happening at the time. I believe she was acting on the advice of her stock broker and unfortunately got caught up in the drama.

Armadillo

Eric Swartz, That's not funny.

Armadillo

Kent Snyder, that's new to me. Thanks for the help.

Corey Taylor

The only reason her biopic was named "Martha Inc." was because they'd already made a film called "GUILTY AS SIN"!

Mike Valsamy

It's legal for people of the house to do "Inside Trading" like the Pelosi family does. Wow, God Bless America.

RM Mike Walkos

Dont like this one. You guys are usually excellent with your answers, but Ms. Stewart actually was convicted of perjury,...giving a false statement to the FBI. She claimed her broker never advised her about the stock. Technical I know, but the insider trading was never proven, only her "false statement," in another of the FBI's famous "perjury traps." Still good work with your trivia quizzes. Love em.

earlepg

I agree with most of comments stated, but I am curious about who the writer of this question was that got such a great response.

deborahpmercer

I never saw the need to send her to jail, even though I'm no great fan of hers.

Emm Yo

Agreed. pnazey,

Emm Yo

Surprising to me that they arrested a woman for this paltry amount when so many politicians, and others, are making millions doing the same.

Bill-Gayle Wenrich

Martha Stewart did not go to jail for insider trading. She went to jail for lying to the FBI.

Kimberly Kennedy

Wrong! It asked what she went to jail for, not what she was accused of. She was sentenced for tax evasion and 3 other felonies. None of which were insider trading.

Pat Salloum

If my investment person advised selling/buying a stock/mutual fund, I'd take the advice. It's his duty to look after clients. He might have insider info, but I sure don't!