Yes, and I do not wish to be a nit picker. But she did not trade with inside information. They never had enough info to proceed.
They take away here is that you should A: Never talk to the cops. B: If you ignore Rule A, don’t lie. C: if you don’t talk, you won’t lie.
From Wiki:
http://en.wikipedia.org/wiki/Martha_Stewart
Stock trading case and conviction
Main article: ImClone stock trading case
According to the U.S. Securities and Exchange Commission (SEC), Stewart avoided a loss of $45,673 by selling all 3,928 shares of her ImClone Systems stock on December 27, 2001, after receiving material, nonpublic information from Peter Bacanovic, who was Stewart’s broker at Merrill Lynch. The day following her sale, the stock value fell 16%.[41]
In the months that followed, Stewart drew heavy media scrutiny, including a Newsweek cover headlined “Martha’s Mess”.[42] Notably, on June 25, 2002, CBS anchor Jane Clayson grilled Stewart on the air about ImClone during her regular segment on The Early Show. Stewart continued chopping cabbage and famously quipped, “I just want to focus on my salad”.[43] On October 3, 2002, Stewart resigned her position, held for four months, on the board of directors of the New York Stock Exchange, following a deal prosecutors had made with Douglas Faneuil, an assistant to Bacanovic.[44]
On June 4, 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. She went on trial in January 2004. Prosecutors showed that Bacanovic had ordered his assistant to tell Stewart that the CEO of ImClone, Samuel D. Waksal, was selling all his shares in advance of an adverse Food and Drug Administration ruling. The FDA action was expected to cause ImClone shares to decline.[45]
Sentence
After a highly publicized six-week jury trial, Stewart was found guilty in March 2004 of felony charges of conspiracy, obstruction of an agency proceeding, and making false statements to federal investigators, and was sentenced in July 2004 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).[45]
Bacanovic and Waksal were also convicted of federal charges and sentenced to prison terms.[46][47] Stewart also paid a fine of $30,000.[48]
In August 2006, the SEC announced that it had agreed to settle the related civil case against Stewart. Under the settlement, Stewart agreed to disgorge $58,062 (including interest from the losses she avoided), as well as a civil penalty of three times the loss avoided, or $137,019. She also agreed to a five-year ban from serving as a director, CEO, CFO, or any other officer role responsible for preparing, auditing, or disclosing financial results of any public company.[49] In June 2008, the UK Border Agency refused to grant her a visa to enter the United Kingdom because of her criminal conviction for obstructing justice. She had been planning to speak at the Royal Academy on fashion and leisure industry matters.[50]