Why Martha Stewart Went to Prison

Martha Stewart has never shied away from controversy, and her new one documentaryaptly titled Martadoubles down on that stance, especially when it comes to her time in prison. It’s a no-holds-barred approach that has since helped her become the world’s first female billionaire. It’s also likely the approach that put her on target in 2003, when she was first charged by federal prosecutors.

“To my friends and loyal supporters, I want you to know that I am innocent – ​​and I will fight to clear my name,” Stewart wrote in an ad defending herself the day after her indictment. “The government’s attempt to criminalize these actions makes no sense to me… I am confident that I will be exonerated of these baseless charges.”

However, as we now know, Stewart was not acquitted and ended up spending five months in federal prison, followed by five months of house arrest and two years of probation. But what exactly were the charges against her? And why was she charged in the first place? Further on, Martha Stewart’s now infamous stint in prison was explained.

The case against Martha Stewart

When charges were filed against her in June 2003, Stewart was already CEO, Chairman and Chief Creative Officer of her multimedia company Martha Stewart Living. However, the charges had nothing to do with her own company. Instead, they focused on an insider trading allegation involving Stewart, her stock broker, and the CEO of a company called ImClone.

In short, ImClone – now a subsidiary of prescription drug giant Eli Lilly – had submitted a drug to the FDA for approval called Erbitux. The drug was not approved and shortly afterwards news broke that several shareholders had sold their shares for the official announcement, suggesting they had prior knowledge of the event. Erbitux’s stock price plummeted and those who sold before the drop saved millions of dollars. In a classic case of insider trading, Stewart was apparently one of the (un)lucky shareholders who knew about the drop and subsequently sold $230,000 worth of stock.

The conviction

After a highly publicized five-week trial, Stewart was convicted by a jury on four counts: conspiracy, obstruction of justice and two counts of lying to an FBI agent. (Notably, she was not convicted of insider trading.) She was sentenced to five months in prison, followed by five months of house arrest and two years of probation.

“I am obviously saddened by the jury’s verdict, but I continue to take comfort in knowing that I have the trust and continued support of my family and friends,” said Stewart. wrote in response to the verdict. “I will appeal the verdict and continue to fight to clear my name. I believe in the fairness of the justice system and remain confident that I will ultimately prevail.”

In September, Stewart spoke at a news conference explaining her decision to begin her sentence while she was still appealing. She was ordered to surrender to federal authorities no later than October 8. She served her time at the Alderson Federal Prison Camp and was released on March 4, 2005. Her appeal was ultimately rejected in 2006.

The aftermath

As Stewart said in her Marta documentary: “I had to pull myself out of a hole.” The cookbook author made her triumphant return to Martha Stewart Living on March 7, just three days after her release, but her TV show, also titled Martha Stewart Livingwas still on hiatus. Meanwhile, the company itself was struggling with layoffs and Stewart was no longer the CEO.

But Stewart was not so easily deterred. On September 12, 2005, she premiered a brand new show, The Martha Stewart Showturning the page and celebrating with her audience: “I’m free! No ankle bracelet!” The show ran for seven seasons. At the same time, she expanded her line of Martha Stewart Everyday products at Kmart, launched a paint line at Sears and introduced her own version of The studentand released a handful of books, including The Martha Rules. Suffice it to say, it was the comeback that no one expected – well, no one, except maybe Stewart himself.