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In short: She was convicted of "insider trading", with some other small things too.

She had stock in a phamaceutical company that was about to release a promising cancer drug, but she heard from someone within the company that the FDA was going to deny the drug(before it happened), and she sold all of her stock. Thus saving herself a boatload of money and more importantly: cheating several hundred buyers of her stock out of thousands of dollors. She did her time for it with the class that only Martha Stewart could have in a Federal Prison.

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12y ago
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Q: Why did Martha Stewart get arrested?
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