NEW YORK (CNN) - Martha Stewart's attorneys may be able to negotiate a settlement with the Securities and Exchange Commission that would permit Stewart to return to the helm of Martha Stewart Living Omnimedia at some point, according to a person familiar with the situation.

"If she's living straight and narrow, will the public be at risk if she became CEO again?" this person said.

The SEC has filed an insider trading case against Martha Stewart, in which it is seeking to bar her from acting "as a director of, and limiting her activities as an officer of, any public company."

The SEC also wants to fine Stewart and force her to give back losses she avoided through her sale ofImClone (Research) stock in the suit, which has been delayed pending resolution of Stewart's criminal case.

Stewart is appealing her conviction last year for lying about the stock sale and obstructing justice, even as she serves a five-month prison term, due to end next week.

There is no SEC rule stating that convicted felons may not be officers of public companies; merely a requirement that the conviction be disclosed if it could impact the company's stock.

The SEC had no comment. Attorneys for Martha Stewart did not return calls and e-mails for comment.

Stewart is expected to be released from prison on March 4 after serving a five-month term. She is then required to serve five months of home confinement.