Martha Stewart Interview: Style Queen Says Much, Reveals Nil

28 January 2003

Martha Stewart, America’s fallen homemaking idol, style goddess, TV celebrity and boss of multimillion dollar corporation Martha Stewart Living Omnimedia, this week bares her soul – or as much of it as her lawyers and PR advisers deem advisable – to The New Yorker magazine.

Understandably declining to expand on her controversial sale of 4,000 ImClone shares on December 27, 2001 (which led to her investigation by the Securities and Exchange Commission and the Justice Department for obstruction of justice and possible insider trading), Steward and her mentors confined her comments to generalizations.

The reactions of her once-adoring public to the allegations she described as “puzzling and also confusing”, insisting that the star-crossed Imclone sale was “entirely lawful”, being triggered by a previous agreement with her stockbroker Merrill Lynch to sell if the price fell below $60.

This version of events is being questioned by investigators and the SEC says it has enough evidence to file charges against her. It is certainly disputed by Douglas Faneuil, the assistant to Stewart’s broker Peter E Bacanovic.

Faneuil pleaded guilty in October to a reduced charge and said he had lied about Stewart’s stock sale. He was dismissed by Merrill and is cooperating with investigators. Bacanovic has also been dismissed but refuses to cooperate.

The big question mark, however, hangs over the testimony of Stewart’s former close friend Samuel D Waksal, ImClone’s founder and ex-ceo. Having pled guilty to fraud and insider trading, he is cooperating with investigators prior to a sentencing hearing on March 17. It is not known, publicly at least, what he has (or has not) revealed as to why Stewart sold her shares on the same day as himself and his daughter.

Meantime, the style goddess’s advisors decided that a little sympathetic PR would not go amiss. According to the article, Stewart’s legal eagles, “frustrated by the bad publicity, saw that there might be advantages for their client in such an interview”, penned by Jeffrey Toobin.

Over lunch, and in the company of her advisors, Stewart sounded to Toobin both plaintive and bellicose. “I've never not been nice to anybody,” she whined wistfully, while complaining that the ImClone affair has left her some $400 million the poorer in legal fees and lost business – to say nothing of the nosedive in value of her shares in MSLO.

As to whether she would comply with a likely demand by the SEC to relinquish her executive roles (chairwoman/ceo) within the company Stewart switched to diva mode: “Quit a business that is my life?” she asked rhetorically. “Impossible!”

Data sourced from: New York Times; additional content by WARC staff