A judge in New York has set a Jan. 12 trial date for home-and-lifestyle expert Martha Stewart, where she will face charges, including securities fraud and obstruction of justice, related to her controversial December 2001 sale of ImClone Systems ( IMCLE) common stock. Stewart recently
decided to step down as chairwoman and CEO of Martha Stewart Living Omnimedia ( MSO), but she remains with her namesake company as a director and chief creative officer. Federal prosecutors have charged Stewart and her stockbroker, Peter Bacanovic, with nine felony counts and said a conviction could mean jail time. Both have pleaded innocent to charges. Stewart and her broker were charged with conspiracy, obstruction of justice and making false statements. Bacanovic is also charged with perjury, accused of giving false testimony under oath to the Securities and Exchange Commission. Stewart is charged with securities fraud. If convicted of all the criminal charges, Stewart faces up to 30 years in jail and fines of up to $2 million. Bacanovic could get 25 years in prison and fines of up to $1.25 million. Stewart faces additional sanctions and fines under an SEC civil prosecution. Prosecutors have alleged that Stewart and Bacanovic entered into a conspiracy to obstruct justice after learning that the SEC had launched an investigation in January 2002 into sales of ImClone stock by Stewart and her friend, ImClone's founder Sam Waksal. Earlier this month, Waksal, the former CEO of ImClone who admitted to insider trading allegations, was sentenced to seven years in prison. He was also ordered to pay $3 million in fines and $1.26 million in restitution. Shares of Martha Stewart Living were up 4 cents to $9.42 on the New York Stock Exchange.