- NEW YORK (Reuters) - Martha
Stewart lied to cover up a potential stock trading scandal and save her
reputation, as well as the huge stake she held in her own company, a prosecutor
charged on Tuesday.
-
- While prosecutor Karen Patton Seymour's opening statement
accused the trendsetter of constructing a cover-up, Stewart's defense attorney
fired back that such charges are based on nothing more than speculation
and guesswork and are not backed by any evidence.
-
- Seated at the front of a packed courtroom and wearing
an olive-colored pantsuit, Stewart, 62, listened intently as the two sides
presented their cases in the long-awaited trial of the woman who turned
a catering business into a media empire, Martha Stewart Living Omnimedia
.
-
- Assistant U.S. Attorney Seymour accused Stewart and Peter
Bacanovic, her former Merrill Lynch broker and a co-defendant in the case,
of hatching a plan "to lie to investigators and come up with a cover
up, a false story" about her suspicious sale of ImClone Systems Inc.
stock.
-
- Seymour said the sale came after Stewart was tipped off
that her friend Sam Waksal, founder of ImClone, was dumping shares in his
own company.
-
- The prosecutor, addressing the jury of eight women and
four men, said Stewart's reputation and the stock price of her multimedia
company would have been severely damaged if the truth surfaced about the
secret tip.
-
- Stewart tried to mislead investors about the trade in
order to halt the growing storm of negative publicity, Seymour said adding
the lifestyle trendsetter stood to lose some $30 million if her company's
stock price collapsed.
-
- "All of this was designed to lift that dark cloud
hanging over her reputation ... she was determined to put her own interest
in front of investors."
-
- Stewart's attorney, Robert Morvillo, countered that prosecutors
based their case on "speculation, surmise and guesswork" drawn
from circumstantial evidence.
-
- "There will be no direct evidence introduced by
the government that Martha Stewart conspired to obstruct anything,"
Morvillo said as Stewart's mother, daughter, sister and friends watched
from the first few rows of the courtroom.
-
- "No witness will appear in this courtroom during
the trial to say 'Martha told me to do something unlawful."'
-
- With his voice alternating between booming and barely
audible during his hour-long statement, Morvillo described Stewart as a
businesswoman who fought to build a successful lifestyle and media corporation.
-
- "Martha Stewart has worked most of her life to improve
quality of life for others," he said, then later added that he was
not asking the jurors for "any special treatment because Martha Stewart
is famous."
-
- The trial, likely to last about a month, centers on charges
that Stewart obstructed justice, made false statements and committed securities
fraud in trying to hide the reasons behind her sale of shares in ImClone.
Stewart could face 10 years in prison if convicted on the securities fraud
count alone.
-
- Bacanovic's lawyer also told the jury the charges against
his client are without merit.
-
- "The government is wrong, they have rushed to judgment
to bring a case against Martha Stewart," Bacanovic's lawyer Richard
Strassberg said. "He has been falsely accused."
-
- Strassberg said that Bacanovic, who was one of Merrill's
top brokers, only made $450 commission from the trade and he would never
have risked his career for that amount.
-
- "He had no incentive to break the rules," he
said.
-
- The government's key witness, Douglas Faneuil, Bacanovic's
former assistant, is expected to testify on Thursday. The trial will not
be held on Wednesday due to an expected storm.
- © Reuters 2004. All Rights Reserved.
-
-
- Comment
- From Jim Mortellaro
- 1-28-4
-
- It's amazing how most 'prosecutors' prosecute cases they
know to be nothing more than a setup. In this case, setting up Martha as
an example to those who would dare become wealthy on their own merits,
from scratch. Prosecutors lying to create for themselves a reputation.
-
- Horse hockey!
-
- The stock involved in the Stewart case accounts for less
than 1% of her investments. She has _no_ need to have cheated on less
than one percent of her wealth.
-
- Here is another example of government sticking it's nose
into the private lives of innocents. Where said noses do not belong.
-
- Nuts!
-
- Jim Mortellaro
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