- NEW YORK (Reuters)
- Martha Stewart (news - web sites)'s lawyers rested their case on Wednesday
after presenting just one witness in the belief that prosecutors failed
to prove securities fraud and other charges against the trendsetter.
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- Closing arguments in the federal court are scheduled
for Monday and Tuesday. The jury will begin deliberations the next day,
six weeks after their selection.
Stewart, a former model and stockbroker who turned a catering company into
a media empire, could face up to 10 years in prison if convicted of securities
fraud, the most serious of the charge against her. Her lawyers decided
against putting the celebrity businesswoman on the stand.
At the heart of charges against Stewart and Peter Bacanovic, her former
Merrill Lynch stockbroker, are accusations that they lied to investigators
to hide the reason behind the celebrity homemaker's sudden sale of nearly
4,000 shares ImClone Systems Inc. (NasdaqNM:IMCL - news) stock on Dec.
27, 2001.
Prosecutors say Bacanovic ordered his assistant to give Stewart a secret
tip that ImClone's founder, Sam Waksal, was dumping all of his shares.
Stewart then quickly acted on the news by selling all of her stock in the
biotech company.
ImClone shares fell steeply the next day when it was announced that health
regulators had given the thumbs down to the company's cancer drug.
However, the defendants deny the charges and maintain that they had a pre-existing
agreement to sell Stewart's shares if ImClone fell to $60.
Lawyers are still awaiting rulings from U.S. District Judge Miriam Goldman
Cedarbaum on whether key charges against Stewart would be dismissed, including
the securities fraud count.
That charge, which the judge has described as novel, accuses Stewart of
proclaiming her innocence in a move to mislead investors in her company,
Martha Stewart Living Omnimedia (NYSE:MSO - news).
Stewart's lawyers rested after putting their sole witness, Steven Pearl,
a former Stewart attorney, on the stand. Pearl was previously an associate
at the law firm that represented her when she was interviewed by federal
authorities in February 2002.
Pearl, who was the junior lawyer during the session, was assigned to take
notes. One key part of his version contradicted a report written by an
FBI (news - web sites) agent who also took notes during the interview.
The interview, which was not tape recorded, provided prosecutors with evidence
for charges that Stewart made false statements to investigators.
While Stewart's lawyers only put Pearl on the stand, Bacanovic's defense
included a handful of witnesses, including Heidi DeLuca, Stewart's business
manager, who provided the strongest testimony for the defense team.
DeLuca backed the defendants' version of the stock sale agreement, saying
that Bacanovic had told her he wanted to set a floor price for the ImClone
shares.
However, prosecutors have sought to discredit DeLuca's testimony by trying
to show her memory was faulty and by portraying her as a loyal employee
who followed Stewart's directives.
In its rebuttal case on Wednesday, prosecutors played a tape of investigators
questioning Bacanovic in which he said he had not discussed a floor price
with DeLuca and that he did not get into that level of detail with her.
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- http://story.news.yahoo.com/news?tmpl=story&ncid=578&e=
17&u=/nm/20040225/bs_nm/crime_marthastewart_dc
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