- NEW YORK (Reuters)
- The judge in the Martha Stewart (news - web sites) trial ruled on Friday
that prosecutors have presented sufficient evidence for the jury to consider
a perjury conviction of the trendsetter's former broker.
U.S. District Judge Miriam Goldman Cedarbaum said the panel could consider
a phone message log taken by Stewart's assistant as a separate piece of
evidence against the broker, Peter Bacanovic.
The ruling came on the jury's third day of deliberations in the trial of
Stewart and Bacanovic, who face conspiracy and other charges related to
Stewart's suspicious sale of ImClone Systems Inc. (NasdaqNM:IMCL - news)
stock on Dec. 27, 2001.
The judge ruled that the evidence in the case met the standard required
for consideration of a perjury conviction against Bacanovic. In order for
a defendant to be found guilty of perjury, jurors must rely on the testimony
of two witnesses, or one witness corroborated by independent evidence.
Cedarbaum ruled that the phone message log can be used as evidence to corroborate
testimony given by Stewart's assistant, Ann Armstrong, regarding a message
Bacanovic left for Stewart.
The jury of eight women and four men, which began their deliberations at
midday on Wednesday, will decide the fate of Stewart, 62, who oversees
a media empire of magazines, books, television programs and home products.
ImClone shares fell steeply the day after Stewart's stock sale when it
was announced that health regulators had refused to approve the company's
cancer drug. ImClone is a biotech company founded by Stewart's friend Sam
Waksal.
Prosecutors allege that Bacanovic, 41, ordered his assistant to tip Stewart
that Waksal was dumping all his ImClone shares. They allege that Stewart
and her broker lied to cover up the secret tip.
The defendants maintain they had a pre-existing deal to sell Stewart's
shares if the share price fell to $60.
Stewart, who built a fortune on home-making advice, recipes and decorating
tips, made $228,000 from the stock sale.
Neither Stewart, a former model and stockbroker who founded Martha Stewart
Living Omnimedia Inc. (NYSE:MSO - news), nor Bacanovic, formerly with Merrill
Lynch, took the witness stand during the seven-week trial.
Since the start of deliberations, the jurors have been reviewing evidence
involving Bacanovic. On Thursday they asked the judge to clarify the definition
of perjury, one of the charges lodged against him.
Armstrong, Stewart's assistant, testified that Bacanovic left a message
on Dec. 27, 2001, telling Stewart that ImClone was going to start trading
downward. Her recollection differs from testimony that Bacanovic gave to
authorities. He said that he left the price of the stock and a message
asking Stewart to call back.
In addition to perjury, Bacanovic is charged with conspiracy, making false
statements, making a false document and obstruction of agency proceedings.
Each of those counts carries a possible maximum prison term of five years
and a $250,000 fine.
Stewart faces one count of conspiracy, two counts of making false statements
and one count of obstruction of agency proceedings. Each count carries
a possible prison term of five years and a $250,000 fine.
Waksal is currently serving a seven-year prison sentence for insider trading.
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