The Wall Street Journal

July 19, 2004 11:22 a.m. EDT

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Martha Stewart Says She's Not Afraid Of Prison


DOW JONES NEWSWIRES
July 19, 2004 11:22 a.m.

NEW YORK (AP)--First, Martha Stewart declared she is used to hard work and isn't afraid of prison.

Later, in an interview with ABC News, the homemaking expert repeated that she would be able to handle it and compared her plight to that of anti-apartheid activist Nelson Mandela.

"I could do it," she said, according to excerpts released by ABC late Friday. "I'm a really good camper. I can sleep on the ground. There are many, many good people who have gone to prison. Look at Nelson Mandela."

Stewart's confident demeanor was strikingly different from her attitude in the courtroom earlier Friday, as a judge sentenced her to five months in prison for lying about a stock sale.

Just before she was sentenced, Stewart - who during her trial spoke only to declare her innocence - rose from her seat and, her voice breaking almost to the point of sobs, told the judge she feared her life would be "completely destroyed."

Stewart also was ordered to spend five months confined to her home and was fined $30,000. She was allowed to remain free pending appeal. The sentence was the minimum possible under federal guidelines.

Peter Bacanovic, the high-powered stockbroker who was convicted along with Stewart of lying about her stock sale in December 2001, received the same sentence of five months in prison and five months home confinement.

Stewart resigned as CEO of the company she founded when she was indicted last year and gave up her seat on the board after she was convicted. She remains its leading creative force and holds the title of founding editorial director.

Investors sent the stock of Martha Stewart Living Omnimedia (MSO) up 37%, or $3.17, to close at $11.81 on the New York Stock Exchange.

The prison sentence punctuated a chain of events that began on 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. (IMCL), a biotechnology company run by her longtime friend Sam Waksal.

Prosecutors alleged that her stock broker 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.

Stewart and Bacanovic were found guilty on four counts apiece on March 5.

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