PEOPLE IN THE NEWS/BREAKING NEWS. Cont'd.
US style guru Martha Stewart has been found guilty of lying to investigators over a suspicious sale of shares in drug company ImClone.
Ms. Stewart was found guilty of conspiracy, making false statements and obstruction of justice. In a statement, Ms Stewart said she had done "nothing wrong" and would appeal against the verdict. She now faces a possible jail sentence, with the charges carrying up to 20 years in prison. However, legal experts say she is unlikely to receive the stiffest possible sentence. Sentencing has been set for 17 June.
Appeal
Ms. Stewart's former stockbroker, Peter Bacanovic, was found guilty of four of the five charges against him. He was acquitted of one charge of making a false statement. The most serious charges of securities fraud, carrying a maximum 10-year jail term, had been dismissed last week. "I am obviously distressed by the jury's verdict but I continue to take comfort in knowing that I have done nothing wrong," Ms Stewart said in a statement on her website. "I will appeal the verdict and continue to fight to clear my name. I believe in the fairness of the judicial system and remain confident that I will ultimately prevail."
Share deal
Photo: Peter Bacanovic was found guilty of four of the five charges against him
The charges centred around sale by Martha Stewart of $228,000 worth of shares in ImClone Systems on 27 December 2001. The sale came a day before ImClone announced that the US Food and Drug Administration had not approved its anti-cancer drug, Erbitux. The news led to a sharp fall in ImClone's shares. Ms Stewart argued that she had an agreement to sell shares in the company when the stock price fell below $60. But the government argued she sold the shares because she had been tipped off in advance about the FDA announcement. ImClone's chief executive Sam Waksal has admitted he sold shares ahead of the announcement and is currently serving a seven year jail term for insider trading.
Business threat
Martha Stewart has become a household name in the United States, through her stable of books, magazines and multimedia offerings. The products give advice on how to eat, dress, marry, garden and entertain in greater style. Her success enabled her to build her company, Martha Stewart Living Omnimedia, into a powerful business. But analysts now say this business could be in jeopardy because of the guilty verdicts. Shares in the company had risen in the run up to the verdict as hopes rose she would be acquitted. But after the guilty verdicts were known, the company's share price plunged 24% when trading in the stock restarted on the New York Stock Exchange. On Thursday, Martha Stewart Living had revealed that the negative publicity surrounding the trial had hit revenues, with advertising pages at its main magazine down 35% last year. BBCNewsWire.