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Martha Stewart to Fight SEC Civil Charges

May 26, 2006  •  Post A Comment

Martha Stewart plans to fight, rather than settle, Securities and Exchange Commission civil charges filed against her in connection with an illegal stock sale for which she was convicted and served a five-month prison sentence.

Lawyers for Ms. Stewart filed with the U.S. District Court for the Southern District of New York late Thursday an 11-page response to the SEC’s complaint, which accuses Ms. Stewart of selling more than 3,900 shares in ImClone Systems based on inside information in December 2001.

If successful, Ms. Stewart could return to serving as chairman and CEO of the company she founded, Martha Stewart Living Omnimedia. Ms. Stewart resigned both positions after she was indicted in June 2003.

If she loses she could be blocked from serving as a director of a public company and could have limited ability to serve as a corporate officer. In addition, she could be fined by the agency.

A spokeswoman for Martha Stewart Living Omnimedia refused to comment.

The SEC charges were filed at the same time that Ms. Stewart was indicted for lying to investigators about the stock sale. However, the SEC stayed its charges until after her criminal case was finished.

The agency began pursuing its charges after Ms. Stewart’s options to overturn her conviction ran out.