Monday, August 7, 2006
The SEC has issued a press release here announcing a settlement on the "insider trading charges against Martha Stewart and Peter Bacanovic relating to Stewart's sale of ImClone Systems stock in December 2001." The press release states:
"Under the settlement, Stewart agrees to an injunction, disgorgement of losses she avoided, and the maximum penalty of three times the losses she avoided, for a total of about $195,000 in monetary relief. Stewart also agrees to a five year bar from serving as a director of a public company and a five year limitation on the scope of her service as an officer or employee of a public company. Bacanovic agrees to an injunction and to pay disgorgement of commissions and a penalty totaling approximately $75,000. In a separate order, the Commission previously barred Bacanovic from associating with a broker, dealer or investment adviser."
And although they have settled, "[t]he defendants consented to the judgments without admitting or denying the allegations in the complaint." The court has to approve this settlement.
This is a win-win situation. The SEC gets to announce that they reached a settlement with Martha Stewart and Martha Stewart can move forward putting this entire matter behind her. The amount, $195,000 is a small price to pay to have this finished. Not having to continue to pay attorney fees in handling this matter alone makes this advantageous to Stewart. (See current report stock report on Imclone here).