According to AP:
Martha Stewart, who completed a five-month prison sentence a year ago for lying about her sale of ImClone stock, has decided to fight rather than settle civil insider trading charges brought by the U.S. Securities and Exchange Commission. In an 11-page response to the SEC complaint filed late Thursday with the U.S. District Court for the Southern District of New York, Stewart denied allegations that she used nonpublic information when she sold 3,928 shares of ImClone Systems Inc. stock in December 2001. Instead, she said she "acted in good faith."
I've long thought the SEC's insider trading argument was a bit of a stretch, but I'm not sure I would have advised Martha to fight these charges. If she goes to trial, the SEC is likely to seek the maximum fine, which is disgorgement of her profits plus a fine equal to three times her profits. Plus, the SEC may seek to bar her from service as a director or officer of a public corporation. (Although I don't think the Sarbanes-Oxley provisions making it easier for the SEC to do so can apply retroactively to Martha's case.)
