Stewart to appeal prison sentence

Martha Stewart announced Monday in an interview on "Larry King Live" that she would write a book about her current legal battles. The famous homemaker was convicted Friday by a Federal Court in Manhattan on charges of lying to investigators about the sale of her stock in the biotech company Imclone Systems Inc. Stewart sold stock she held in the company shortly before the FDA rejected a drug the company wanted to sell in the United States.\nU.S. District Judge Miriam Cedarbaum passed the minimum legal sentence of five months in jail followed by five months of house arrest. Stewart was also fined $30,000. \nJane Mallor, IU professor of business law, said ethics in the business world has received a lot of attention lately because of recent financial scandals. \n"The whole system of business runs on ethics," Mallor said. "Without honesty and trust, there is no business."\nMartha's sentencing came on the heels of the indictment of former Enron Chairman and CEO Kenneth Lay, who was indicted last week on 11 counts of wire, bank and securities fraud and making false statements to banks.\nIf Lay is convicted on all counts, he could face up to 175 years in prison and $5.7 million in fines. Lay has pleaded not guilty to all the charges and was released on $500,000 bail.\nAt the beginning of 2001, Lay's fortune was estimated at $400 million, most of it in Enron shares. Lay had made plans to retire and chose Jeffery Skilling as his successor. However, when Skilling suddenly retired in August 2001, Lay had to resume his role as CEO of Enron and was in charge when financial scandals began to plague Enron.\nEnron filed for bankruptcy on Dec. 2, 2001, after investigators found that it had used partnerships to hide more than $1 billion in debt. Enron's collapse was followed by a spate of financial scandals in some of America's top corporations, such as WorldCom, Global Crossing, Adelphia Communications and Tyco International.\nAround 20,000 Enron employees lost millions of dollars in retirement and savings accounts when Enron's stock crashed.\nLay sold 918,000 shares of Enron in the months before the company's collapse. In response to his indictment, Lay held a press conference in which he said the stocks were sold to pay back loans. \nDavid Rubenstein, a Kelley School of Business professor, said he includes a section on white-collar crime in his business strategy class, which is required for business students. He said business leaders are responsible for managing their companies ethically.\n"So many people who were financially dependant on Enron had dreams, and now their dreams are broken because Lay wasn't a better manager," Rubenstein said.\nHe said ethics is an important part of the business school's curriculum. \n"We can't guarantee the outcome," Rubenstein said. "We can only make the opportunity available and hope that (students) do it in an honest way."\nSenior Erick Watt-Udogu, a business major, said although ethics is discussed in the business school, it is only a footnote.\n"I hope that Ken Lay provides an example for young business people who trade morality and uprightness for a quick buck," Watt-Udogu said.\n-- Contact staff writer Priyanka Shewakramani at pshewakr@indiana.edu.