Martha Stewart Settles Civil Lawsuit

Martha Stewart Settles Civil Lawsuit
Martha Stewart
ANDREA RENAULT/Globe

08/07/2006 12:30PM

Martha Stewart has finally put her insider-trading charges behind her. The domestic diva has agreed to pay $195,000 and not to serve as a director of a public company for five years in order to settle a civil lawsuit against her, the Wall Street Journal reports.

Her stockbroker, Peter Bacanovic, agreed to pay $75,000 in fines and penalties.

Stewart, 65, was convicted in a 2004 criminal trial of conspiracy, obstruction of justice and other charges stemming from her 2001 sale of ImClone Systems stock. She served five months in prison and five months under house arrest.

In May, Stewart was required to respond to a civil complaint filed by the Securities Exchange Commission. She announced in June that she would not fight the charges.

The new settlement will limit Stewart's role in Martha Stewart Living Omnimedia, Inc., where her current title is "founder," the Journal reports.

"This settlement achieves everything we sought to accomplish in pursuing this case," said Mark K. Schonfeld, director of the SEC's northeast regional office, in a statement. "The combination of monetary relief and future professional restrictions serve both to sanction the defendants' insider trading and to restrict them from future positions of investor trust."

Lawyers for Stewart could not be reached for comment. She and Bacanovic settled without admitting or denying guilt, according to the Journal.

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