Martha Stewart Case Analysis

From the top to the bottom and back again--Some may hear this and think of a rollercoaster. Some may hear it and think of a yo-yo. But ask Martha Stewart and she'll say, "That was my life". Let's take a ride on the Martha Roller-Coaster.

• 1976: Martha Stewart founds a catering company in Connecticut.

• 1982: Stewart's first book, Entertaining, is published.

• 1987: Kmart signs Stewart to a five-year consulting contract.

• 1990: The first issue of Martha Stewart Living is published by Time Inc.

• 1993: Stewart begins hosting a weekly television show, Martha Stewart Living.

• 1995: Martha Stewart Living is voted "Magazine of the Year" by Ad Age; the Martha by Mail catalogue is launched.

• 1997: Stewart buys the company bearing her name from Time Warner.

• 1999: Martha Stewart Living Omnimedia, Inc. goes public on the New York Stock Exchange. The initial public offering was one of the most successful ever and made her a billionaire.

• 2001: Stewart avoided a loss of $45,673 by selling all 3,928 shares of her ImClone Systems stock

• 2002: Martha Stewart resigned her position, held for four months, on the board of directors of the New York Stock Exchange, following a deal prosecutors made with Douglas Faneuil, assistant to Bacanovic

• 2003: Stewart was indicted by the government on nine-counts including charges of securities fraud and obstruction of justice. Stewart voluntarily stepped down as CEO and Chairwoman of MSLO but stayed on as chief creative officer.

• 2004: After a highly publicized, five-week jury trial that was the most closely watched of a wave of corporate fraud trials, Stewart was found guilty of conspiracy, obstruction of an agency proceeding, and making false statements to federal investigators and sentenced in to serve a five month term in a federal correctional facility and a two year period of supervised release (to include five months of electronic monitoring).

• 2005: Stewart is released from prison and welcomed back to her company

• 2006: the Securities and Exchange Commission announced that it had agreed to settle the related civil case against Stewart. Under the settlement, Stewart agreed to a five-year bar from serving as a director, or as the CEO, CFO (or other officer roles in which she would be responsible for preparing, auditing, or disclosing financial results), of any public company.

• 2007: Martha Stewart Living Omnimedia announced that it inked a partnership with E & J Gallo Winery to produce a wine brand with the label "Martha Stewart Vintage" (for sale in 6 cities, January. The 15,000 cases to be sold include: 2006 Sonoma County Chardonnay, 2005 Sonoma County Cabernet Sauvignon and 2006 Sonoma County Merlot (for Atlanta, Boston, Charlotte, N.C., Denver, Phoenix, and Portland, Oregon).

• 2008: MSL Omnimedia announced that the company had reached an agreement with celebrity chef Emeril Lagasse to purchase certain business assets for $50 million: $45 million in cash and $5 million in stock.[4] With the exclusion of Emeril Lagasse's restaurant chain and his foundation, the deal consists of the rights to television programs such as Essence of Emeril and Emeril Live, Emeril Lagasse's Cookbook library, the emerils.com website, and kitchen and food products.

And the list goes on and on.... the roller-coaster is climbing higher and higher….

What has happened to the key players since the events in this case?

Martha Stewart/MSLO--- rebuilt the company to include merchandising in Wal-Mart, wine production, a 24-hour satellite radio channel with Sirius, and launched a line of houses that carry her name to be built by KB Home initially in Cary, North Carolina.

Peter Bacanovic--- time as a Wall Street stockbroker came to a disastrous end when he was jailed for perjury after the ImClone case. Now his second career as CEO of high-end jewelry company Fred Leighton is over, as well. He was named chief executive officer of jeweler Fred Leighton in Dec. 2007. But his position was eliminated in Jan. 2009 as the company continued its reorganization to emerge from bankruptcy.

Samuel D. Waksal -- sentenced to seven years and three months in prison and ordered to pay more than $4 million in fines and back taxes, all the maximum punishments allowable under law. Waksal was not eligible for parole. Waksal wanted to go to Federal Prison Camp, Eglin, but instead he went to Federal Correctional Institution, Schuylkill. He was serving