- NEW YORK (Reuters)
-- Martha Stewart escaped the most serious charge in her trial on Friday
when a federal judge threw out a securities fraud count that could have
landed the lifestyle trendsetter in prison for 10 years.
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- U.S. District Judge Miriam Goldman Cedarbaum said the
government failed to produce enough evidence to bring that count to the
jury. Stewart, who still faces charges of lying to investigators, promptly
posted an Internet letter to reassure her fans.
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- "As my trial nears its conclusion, I am hopeful
and optimistic that I will be exonerated," Stewart said in a letter
posted on her Web site.
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- "I'm pleased that the judge has dismissed the most
serious of the charges against me, concluding that there is no evidence
to support it."
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- A smiling Stewart went arm-in-arm with her lawyers to
a nearby Chinatown restaurant for a celebratory lunch after the judge issued
the ruling, stopping to greet fans along the way. Most days since proceeding
began on Jan. 20, Stewart has stayed at the courthouse to eat lunch.
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- Stewart and her former stockbroker, Peter Bacanovic,
still face charges of lying to investigators looking into the celebrity
businesswoman's suspicious sale of ImClone Systems Inc. stock in December
2001. The jury will begin deliberating those charges on Wednesday.
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- Shares of her company, Martha Stewart Living Omnimedia
Inc., jumped after the securities fraud count was dismissed, closing almost
11 percent higher.
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- The judge had previously described the charge as novel
and problematic. It accused Stewart of proclaiming her innocence in a move
to mislead investors in her company and protect the financial health of
Martha Stewart Living, the media empire she built out of a catering business
.
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- "In assessing the sufficiency of the evidence, I
have concluded that no reasonable juror can find beyond a reasonable doubt
that the defendant lied for the purpose of influencing the market for the
securities of her company," Cedarbaum said in a written opinion.
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- Manhattan federal prosecutors declined comment.
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- Cedarbaum issued the ruling as she met with lawyers in
a closed session to determine what instructions to give jurors to guide
their deliberations next week. Closing arguments will be delivered on Monday
and Tuesday.
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- Prosecutors charge that Bacanovic had ordered his assistant
to warn Stewart that ImClone's founder was dumping his shares. They say
that Stewart then traded on the tip.
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- Bacanovic and Stewart deny any such scheme and maintain
they had a pre-existing agreement to sell Stewart's shares if the price
fell to $60.
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- The securities fraud count was based on three public
statements Stewart made in June 2002 after the media began reporting investigations
of her ImClone trade. In those statements, Stewart described the pre-existing
agreement to sell ImClone, insisted the transaction was proper and denied
trading on insider information.
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- "The government has offered no evidence that Stewart
evinced a concern for the price of MSLO stock at any time during the relevant
period," Cedarbaum said.
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- Hal Shaftel, an attorney with the Manhattan-based law
firm Proskauer Rose, said the charge was "quite novel" because
it would, "gag somebody from proclaiming their innocence in the face
of a prosecution."
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- Shares of Martha Stewart Living Omnimedia, were up $1.43
$14.53 in late afternoon trading on the New York Stock Exchange.
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- Martha Stewart Living's stock has dropped and advertising
revenue fell amid its founder's legal woes. It also cut the circulation
it guarantees to advertisers at Martha Stewart Living magazine because
of readership declines.
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- http://biz.yahoo.com/rb/040227/crime_marthastewart_6.html
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