Martha Stewart Begins Living, Pays $195,000 to Settle SEC Probe.

The United States Security and Exchange Commission will be receiving $195,000 from Martha Stewart to settle a probe into insider trading allegations. 

As founder of Martha Stewart Living Omnimedia Inc., Stewart will be able to “continue in her role as founder and as the creative force behind the brand” according to a statement made by the company. According to the agreement made with the SEC, Stewart can not work as a company officer that handles financial reporting or legal compliance for five years.

For Stewart the settlement “brings closure to a personal matter and my personal nightmare.”

Stewart served five months in prison and an additional five months of house arrest for her 2004 conviction involving the sale of ImClone stock she held. The media mogul was found guilty of obstruction of justice in her criminal trial concerning that sale. The SEC accused Stewart of dumping all of her shares held in ImClone based on insider information. After finding out that the CEO and his daughter were selling their stock Martha quickly unloaded all of her holdings, avoiding a loss of $45,673 after it was revealed to her that the biopharmaceutical company would not be granted a license for a cancer drug.

It was Stewart’s broker, Peter Bacanovic, who tipped her about the sales of stock by Waksal and his daughter. Bacanovic was also at the center of an SEC investigation which he settled by paying $75,000. He is not allowed to associate with brokers, dealers or investment advisors according to the agreement.

Bruce Karpati, an assistant director in the SEC's enforcement division said “This case sends a strong message that the commission will not tolerate insider trading, especially where brokers tip their clients with confidential information that company insiders are selling their shares.”