Martha Stewart sold a stock while flying to Mexico that saved her $45,673, but turned into a $1 billion loss and prison time; the reason why she doesn't own a private jet

Selling 3,928 shares of ImClone Systems in December 2001 helped Martha Stewart avoid a possible loss of $45,673. However, the stock sale gave rise to a federal investigation that eventually landed her behind bars for five months and resulted in a great deal of damage to her commercial empire. After nearly 25 years, Stewart claims that the legal nightmare cost her around $1 billion, which she cites as the reason why she does not own a private plane.

Speaking on MasterClass founder David Rogier’s podcast Other People’s Business in October 2026, Stewart discussed Kim Kardashian’s business success and her Gulfstream G5 private jet. Asked why she did not own one herself, the 85-year-old replied, “Because I fell in a hole. And I lost about a billion dollars in my legal problems. The lawyers took me to the cleaners, and they were horrible.”

Stewart said her forthcoming autobiography would explore the experience. She also emphasised her recovery, adding, “But I’m back. I mean, I’m pretty good.”

The $45,673 stock sale that triggered the scandal

On December 27, 2001, Stewart sold her shares of ImClone just as the biotechnology firm was anticipating an important decision from the US Food and Drug Administration about the efficacy of one of its experimental cancer drugs called Erbitux.

According to the report by the SEC, the chief executive of ImClone, Samuel Waksal, learned that the FDA was planning on rejecting their proposal. It is at that time that Waksal, together with his family, tried to dispose of his shares.

Stewart’s broker, Peter Bacanovic, learned about those sales and had his assistant, Douglas Faneuil, inform Stewart. She then ordered the sale of her 3,928 shares. The FDA decision became public the following day, and ImClone’s stock fell sharply.

The SEC subsequently calculated that Stewart avoided losses of $45,673. Investigators questioned whether she had received confidential information and whether her explanation for the sale was truthful.

Why Martha Stewart went to prison

In March 2004, a federal jury found Stewart guilty of conspiracy, obstruction of justice and making false statements to the government investigators. Stewart was sentenced to spend five months in jail and another five months under house arrest. Stewart was incarcerated in October 2004, and was released from jail in March 2005.

Stewart was not found guilty of the crime of insider trading. Rather, her criminal conviction was based on her behavior in the investigation process.

Also, in a separate civil proceeding, the SEC made an announcement about the settlement in August 2006. Stewart agreed to pay $195,081, consisting of $45,673 in disgorgement, $12,389 in interest, and a $137,019 penalty.

These documented payments were far smaller than the billion-dollar loss she now describes.

How the scandal affected her business empire

Stewart was already a billionaire by making Martha Stewart Living Omnimedia public in 1999. This corporation brought together all of her publishing, television, and merchandise ventures to make her brand a money-making machine.

One major revenue source was her Kmart licensing partnership. Stewart recently recalled on Rogier’s podcast that the deal generated as much as $65 million annually in royalties, helping finance her magazine and broader business operations. At its peak, she said, the merchandise line generated nearly $2 billion in annual sales.

The scandal hit a company that had built up a reputation around its founder. After being indicted, Stewart resigned from her posts as chairwoman and CEO, and the company dealt with falling stock values and other troubles in both publishing and retail businesses.

In 2015, Sequential Brands Group signed an agreement to purchase Martha Stewart Living Omnimedia for around $353 million. That was a large reduction compared to the value of the company when it went public at around $2 billion in 1999, but this does not provide a measure of Stewart’s personal financial loss.

The brand was subsequently sold to Marquee Brands in 2019.

Did Martha Stewart really lose $1 billion?

Stewart has not publicly provided a detailed calculation supporting her estimate. The figure may encompass legal expenses, falling shareholdings and lost commercial opportunities, but their individual contributions have not been independently established.

The decreasing value of the company shows the extent of disruption to the business, but market capitalization is not the same as wealth in a personal capacity. Also, all of the difference between the valuation of the company before and the price that the company was finally sold for is not entirely due to the scandal.

According to Celebrity Net Worth, the net worth of Stewart stood at $400 million in 2026. However, this is still an external estimation and not an audited accounting.

Regardless, she managed to re-launch her career after being imprisoned and has come back to television as well as developed her personal brand. She worked with Snoop Dogg on the show Martha & Snoop’s Potluck Dinner Party.