In 2002, Martha Stewart made shocking headlines when it was reported that she was under investigation for securities fraud. On December 27, 2001, Stewart sold all of her shares of ImClone stock the day before the company’s cancer drug was declined by the Food and Drug Administration. Stewart allegedly got a tip-off from her broker, Peter Bacanovic, who was given the info by ImClone founder Samuel D. Waksal.
During the investigation, Stewart and Bacanovic told the SEC that they had agreed upon a plan to sell the stock if it fell under $60. However, there was no record of their conversation but Stewart maintained her innocence. Things came to a head when Bacanovic’s assistant, Doug Faneuil, admitted that he had been ordered to repeat Stewart and Bacanovic’s claims. The case went to trial and on March 5, 2004, Stewart was found guilty of conspiracy, obstruction, and lying to federal investigators. The domestic mogul was sentenced to five months in prison and five months of house arrest, with two years of probation.
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Stewart called her sentencing “shameful” and “an almost fatal circus event of unprecedented proportions,” according to Inside Edition. She thanked all the fans that stood by her and adamantly stated, “I’m not afraid. I’m not afraid, whatsoever.” True to her word, Stewart didn’t let her prison stint deter her and went on to make one of the biggest comebacks in history.
