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PRINT EDITION
Martha Stewart juggernaut rolls on at the Royal
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Doyenne of domesticity dodges questions
about SEC probe of alleged insider trades


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By JOHN SAUNDERS 
  
  
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Saturday, November 9, 2002 – Page B3

TORONTO -- Martha Stewart, a stockbroker who reinvented herself as America's arbiter of domestic perfection, led her cameras through the poultry barn at Toronto's Royal Agricultural Winter Fair yesterday, working hard to keep her media and merchandising machine rolling amid the dust of a decision that saved her a trivial sum, at least by her standards.

"Martha's the blonde one," said Bob Thompson, 79, a retired poultryman from Port Perry, Ont., watching from behind the crew. "I hope she doesn't go to jail."

Mr. Thompson said he was there for the ducks and chickens, but had seen Ms. Stewart on television and liked her. "She's a good advertisement for what she does, the women's work," he judged.

Her own Web site, marthastewart.com, puts it this way: "When America wants to learn how to make the perfect piecrust, grow an herb garden, create a beautiful flower arrangement, or fix a broken windowpane, it turns to Martha Stewart."

These days, it also turns to her to learn how she came to sell 3,928 shares of Imclone Systems Inc., then headed by an old friend, Sam Waksal, the day before bad news broke last winter about the prospects of a proposed anti-cancer drug called Erbitux.

At about $58 (U.S.) a share, her stake fetched $228,000. If she had sold the following week, when the news was out and the stock was in the 40s, it might have yielded $45,000 to $65,000 less. (It would still have been a good idea to sell. The stock closed last night at $8.97 on the Nasdaq Stock Market.)

The question of timing, compounded last month by Dr. Waksal's insider-trading confession, has kept her under investigation by the U.S. Securities and Exchange Commission and the U.S. Justice Department for months.

She has denied any wrongdoing or inside knowledge and faces no charge yet, but hints of imperfection have not not helped the ratings of her television shows, the sales of her magazines or the share price of her company, Martha Stewart Living Omnimedia Inc., which closed at $8.14 yesterday on the New York Stock Exchange, down 58 per cent since her name was first linked to the trading scandal in June.

She was not about to discuss such problems in the poultry barn. "We're talking about the fair today," she said. "Sorry." A professional, she managed to smile.

If anything comes of the investigation, her professionalism may be a liability, because she cannot style herself a simple supplier of homemaking advice.

Now 61, she worked in her late twenties and early thirties as a broker for a New York firm called Monness, Williams and Sidel. "We were hotshots. I was making about $135,000, which was a lot more than even a medium lawyer's salary in those days," she told Working Woman magazine seven years ago.

After the market tanked in 1973, she left Wall Street, moved into a picturesque house in Westport, Conn., built a catering business and developed her persona. This led to the books, magazines, TV shows, Martha Stewart brand housewares and a multimillion-dollar fortune.

She may be a symbol of domesticity, but she is also the chief executive officer of an NYSE-listed company and a former member of the exchange's board of directors. Appointed in June, she quit the board last month as the legal clouds around her darkened.

For the Imclone trade, she used a broker at Merrill Lynch who also handled trading for Dr. Waksal. She and the broker have said that she left a standing order to sell if the price fell below $60. Their account came under stress last month when the broker's former assistant said he knew of no such order and pleaded guilty of receiving money and other benefits for saying he did.

At the Royal, Ms. Stewart was taping material for one of her syndicated U.S. shows, Marth Stewart Living, and for a Canadian special, House & Home Country Living, scheduled for tomorrow evening on the HGTV specialty channel.


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