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Martha Stewart's Insider Trading Conviction and Prison Sentence
The media mogul served five months in prison in 2004-2005 for lying to federal investigators about a stock trade
Mar. 4, 2026 at 12:15pm
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In 2004, Martha Stewart was found guilty of conspiracy, obstruction, and making false statements to federal investigators regarding her sale of ImClone shares in 2001. She was sentenced to five months in prison and two years of probation. After serving her sentence, Stewart returned to her successful media career, launching new TV shows and business ventures.
Why it matters
Stewart's conviction and prison time were highly publicized, as she was a prominent businesswoman and media personality. The case highlighted issues around insider trading, corporate accountability, and the consequences of lying to federal investigators.
The details
Stewart was accused of selling her nearly 4,000 shares of ImClone stock in December 2001 based on a tip from her stockbroker that the CEO of ImClone was dumping his shares after learning the FDA was going to reject the company's cancer drug. Stewart and her stockbroker claimed they had a prior agreement to sell the shares if the price fell below $60, but investigators found no record of such an agreement. Stewart was convicted of conspiracy, obstruction, and making false statements to the FBI and SEC about the trade.
- Stewart was convicted in March 2004.
- She was sentenced to five months in prison in July 2004.
- Stewart served her sentence from October 2004 to March 2005.
- Within a year of her release, Stewart launched two new TV shows.
The players
Martha Stewart
A successful media mogul, entrepreneur, and TV personality who was convicted of insider trading-related charges in 2004.
Peter Bacanovic
Stewart's stockbroker who was also charged and convicted in the insider trading case.
Sam Waksal
The CEO of ImClone who was selling his shares of the company's stock after learning the FDA was going to reject the company's cancer drug application.
James Comey
The United States Attorney for the Southern District of New York who announced the charges against Stewart.
What they’re saying
“This criminal case is about lying — lying to the F.B.I., lying to the SEC, lying to investors.”
— James Comey, United States Attorney for the Southern District of New York
“I'll be back. I will be back. I'm used to all kinds of hard work, as you know, and I'm not afraid. I'm not afraid whatsoever.”
— Martha Stewart
“The experience of the last five months in Alderson, West Virginia, has been life-altering and life-affirming.”
— Martha Stewart
What’s next
Stewart has continued her successful media and business career since her release from prison, launching new TV shows, product lines, and other ventures. She remains an influential figure in the business and entertainment worlds.
The takeaway
Martha Stewart's insider trading conviction and prison sentence highlighted the serious consequences that can result from corporate misconduct and lying to federal investigators. However, Stewart was able to rebuild her career and brand after serving her time, demonstrating resilience and the ability to overcome a high-profile legal scandal.
