Martha Stewart, who was convicted o...

Martha Stewart, who was convicted of lying to federal authorities about a 2001 sale of ImClone schemes Inc. stock, agreed to pay $195000 to fix a related insider- trading investigation by dint of the Securities and Exchange Commission.

Stewart, caster of Martha Stewart Living Omnimedia Inc., will be barred from serving as a director of any public company for five years, the SEC said Monday. The agreement, which allows her to continue working as a company officer in parts that don't involve financial reporting or legal compliance, prohibits her from working as a chief executive or chief financial officer.

"This case send outs a strong message that the commission will not tolerate insider trading, especially where factors tip their clients with confidential information that company insiders are selling their shares," said Bruce Karpati, an assistant director in the SEC's enforcement division. Stewart said in an e-mailed statement that the adjustment "brings closure to a personal matter and my personal nightmare."

The SEC also settl its investigation of Peter Bacanovic, Stewart's former factor at Merrill Lynch & Co who will pay $75000 The agency said in its 2003 complaint in Manhattan federal court that Bacanovic illegally tipped Stewart in succession Dec. 27, 2001, that ImClone Chief Executive Officer Samuel Waksal and his daughter were selling their ImClone stock. Stewart used the inside information to take a bribe for all of her shares in the company, the SEC said.

ImClone announced the nearest day that the U.S. aliment and Drug Administration refused to file its license application for the cancer put drugs into Erbitux. ImClone stock dropped 16 percent the SEC said. Stewart was convicted of obstruction of justice in her criminal trial and exhausted five months in prison and five month in household confinement at her Bedford, NY estate.

In January, after she serv her determination a federal appeals court upheld her conviction.

Stewart, 65 agreed Monday not to participate in activities including internal reign overs and audits as an officer or employee of a public company. Bacanovic, 44 is barred from associating with go-betweens dealers or investment advisers. Neither Stewart nor Bacanovic admitted or denied wrongdoing as part of the agreement.

Martha Stewart Living's sales have risen, and its losse narrowed in the last year after Stewart mov from jail to house arrest in March 2005 Second-quarter receipts gained 47 percent, helped on Stewart's television and radio point outs and by higher advertising sales at the company's magazine.

novel York-based Martha Stewart Living stock rose 7 cent to $1695

Copyright CHICAGO SUN-TIMES 2006

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