NewsMax.com
Friday, July 16, 2004

"I'm not afraid. Not afraid whatsoever. I'm very sorry it had to come to this," she told a crowd of media and supporters afterward, speaking in a strong voice on the courthouse steps.

Stewart, who was also ordered to serve five months of home confinement and fined $30,000, did win a key victory when U.S. District Court Judge Miriam Goldman Cedarbaum stayed her sentence pending appeal, a process that could last many months.

The sentence was far less than it could have been. Experts had predicted she would receive 10 to 16 months.

In the courtroom, Stewart, 62, appealed in a shaky voice for a reduced sentence, asking the judge to "remember all the good I have done."

"Today is a shameful day. It's shameful for me, for my family and for my company," she said. As she was sentenced, Stewart sat with her legs crossed and her hands in her lap, showing no emotion.

'Small Personal' Felony

But outside the courthouse, Stewart was confident and upbeat. She smiled broadly to the cheers of supporters as she complained that a "small personal matter" had been blown out of proportion. She even plugged her company's magazine and products, while joking that she didn't mean to make a sales pitch.

Cedarbaum rejected a defense request to send Stewart to a halfway house for the first five months, noting that "lying to government agencies during the course of an investigation is a very serious matter."

Prosecutor Karen Patton Seymour had argued for a heavier sentence.

"Ms. Stewart is asking for leniency far beyond what ordinary people who are convicted of these crimes would receive under the sentencing guidelines," she said.

The jail term was the latest blow for Stewart, once the CEO of a $1 billion media empire. After her 2003 indictment, she resigned as head of Martha Stewart Living Omnimedia Inc. After her conviction, she surrendered her seat on its board.

Stock Rises

Shares of Martha Stewart Living Omnimedia, which have lost half their value in the two years since the scandal began, initially surged more than 38 percent on the news. In midday trading, the shares were up $1.89, or about 22 percent, at $10.53 on the New York Stock Exchange.

Her fall from grace did little to hurt her standing among Stewart's fans. In the final weeks before sentencing, hundreds of well-wishers sent letters to the judge asking for mercy.

Former Merrill Lynch & Co. stockbroker Peter Bacanovic, who was convicted along with Stewart of lying about the 2001 stock sale, was scheduled to be sentenced later Friday.

It was Dec. 27, 2001, when Stewart, in a brief phone call from a Texas tarmac on her way to a Mexican vacation, sold 3,928 shares of ImClone Systems Inc., a company run by her longtime friend Sam Waksal.

Prosecutors alleged that Bacanovic, 42, ordered his assistant to tip Stewart that Waksal was trying to sell his shares. ImClone announced negative news the next day that sent the stock plunging. Stewart saved $51,000.

Stewart and Bacanovic always maintained she sold because of a preset plan to unload the stock when it fell to $60. ImClone now trades around $80.

© 2004 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.

Read more on this subject in related Hot Topics:

Corporate Scandals