Summary
Among other civil sanctions imposed by the SEC, Martha Stewart is barred for five years from serving as a director, CEO or CFO for any public company, including Martha Stewart Living Omnimedia Inc. (NYSE: MSO).
Analysis
The referenced SEC litigation release/settlement, among other civil sanctions, (i) bars Martha Stewart from serving as a director on the board of directors of any public company for five years and (ii) limits the scope of her service as an officer or employee of any public company for five years. The former “bar” prohibits Martha Stewart from reassuming any position on MSO’s board of directors for five years. The later “limitation” explicitly prohibits her from “participating in certain activities, including financial reporting, financial disclosure, monitoring compliance with the federal securities laws, internal controls, audits or Commission filings.” Since Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 require that a company’s CEO and CFO personally certify quarterly and annually that the related Form 10-Q Quarterly Reports and Form 10-K Annual Reports, respectively, are “fairly stated, in all material respects,” the aforementioned “limitation” effectively bars her from reassuming MSO’s CEO position for five years. As a result, Martha Stewart will be limited to non-officer promotional, creative and operational roles with MSO for five years.
