- NEW YORK (Reuters) - A color-coordinated
Martha Stewart quietly pleaded not guilty on Tuesday to securities fraud
charges that could land her in jail, while prospective jurors were quizzed
behind closed doors by a judge worried that their privacy not be violated
by the high-profile case.
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- "Not guilty," Stewart responded softly as a
federal judge read each of the five counts against her. Wearing a brown
jacket, brown blouse and coordinating pants, the former stockbroker and
model turned into the nation's leading lifestyle arbiter, looked calm and
composed as she turned to glance at reporters who filled the cavernous
courtroom.
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- Charges that Stewart and her former Merrill Lynch &
Co. broker Peter Bacanovic obstructed an investigation into her sale of
ImClone Systems Inc.
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- (Nasdaq:<http://us.rd.yahoo.com/dailynews/finance/nm/bs_nm
- /storytext/*http://finance.yahoo.com/q?s=imcl&d=tIMCL
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- <http://us.rd.yahoo.com/dailynews/biz/nm/bs_nm/storytext
- /*http://biz.yahoo.com/n/i/imcl.htmlnews)
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- stock have grabbed the public's attention and generated
a media frenzy. The judge in the case described the press interest as "extraordinary."
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- One after another, more than 30 potential jurors were
called into a private room to be questioned by U.S. District Judge Miriam
Goldman Cedarbaum. Reporters were not allowed to attend the sessions, known
as voir dire.
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- Some jurors sat through the early evening hours -- reading
books, making small talk or dozing -- while waiting to be taken back for
questioning. Stewart, who was present during the voir dire, emerged shortly
before 6:30 p.m. EST, declined comment and was escorted to a waiting black
sedan in front of the federal courthouse.
-
- Repeating the frenzy that accompanied her arrival, television
crews and photographers called to Stewart and jockeyed for position to
have the best shot of her exit.
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- A small number of fans braved the cold to show their
support for Stewart, whose trial is expected to last six weeks. Among them
was John Small, the editor of the SaveMartha.com Web site who appeared
in a chef's hat and apron that proclaimed: "She didn't do the crime,
but she sure can do the thyme!"
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- "I think Martha Stewart is on trial for being Martha
Stewart," he said.
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- Inside, jury selection began shortly after Stewart and
Bacanovic pleaded not guilty to charges contained in a new indictment issued
earlier this month.
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- Stewart, who built her catering company into Martha Stewart
Living Omnimedia
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- (NYSE:<http://us.rd.yahoo.com/dailynews
- /finance/nm/bs_nm/storytext/*http://finance.yahoo.com/q?s=mso&d=tMSO
-
- <http://us.rd.yahoo.com/dailynews/biz/nm/bs_nm/storytext
- /*http://biz.yahoo.com/n/m/mso.htmlnews),
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- stood when introduced by the judge and nodded her head
slightly toward the potential panelists.
-
- Cedarbaum told the jurors she expected opening statements
in the case to begin next week, suggesting it will take several more days
to find a jury for the high-profile case.
-
- Stewart's sale of stock in ImClone, a company founded
by her friend Sam Waksal, came just before ImClone shares tumbled on news
that health regulators had rejected a key drug application by the company.
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- While not indicted for insider trading, Stewart is accused
of lying to investigators, obstructing justice and securities fraud. If
convicted of the most serious charge, securities fraud, Stewart faces up
to 10 years in prison.
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- Results from a Reuters/DecisionQuest poll released on
Monday night showed that only 27 percent of Americans would find Stewart
guilty if they served on her jury.
-
- "She has a fighting chance," said Philip Anthony,
chief executive of DecisionQuest, a leading trial consulting firm, owned
by Bowne & Co
-
- (NYSE:<http://us.rd.yahoo.com/dailynews/finance/nm/bs_nm/storytext/</
FONT>
- *http://finance.yahoo.com/q?s=bne&d=tBNE -
- <http://us.rd.yahoo.com/dailynews/biz/nm/bs_nm/storytext/
- *http://biz.yahoo.com/n/b/bne.htmlnews).
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- The key question that jurors will have to decide is whether
Stewart had put in a so-called stop-loss order on ImClone. While Bacanovic
jotted "@60" on a work sheet he used for Stewart's account, prosecutors
charge that particular notation was made in a different ink than other
markings on the page.
-
- Bacanovic, they say, simply added that notation when
investigators began to question the timing of the sale.
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- Phone records will also be used as evidence. Stewart
changed her phone log, the government says, to read "Peter Bacanovic
Re: ImClone" from the original Dec. 27 phone message that read "Peter
Bacanovic thinks ImClone is going to start trading downward."
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- Stewart later changed the phone log back to its original
message, they say.
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- Bacanovic's assistant, Douglas Faneuil, is also expected
to be called as a witness to testify he informed Stewart that Waksal was
dumping his shares.
-
- (Editing by Michael Miller; Reuters Messaging;paul.thomasch.reuters.com@reuters.net,
(212) 393 9461, gail.appleson.reuters.com@reuters.net; (212) 385 2466))
-
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