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   Martha Stewart - Charge dropped

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Topic: Martha Stewart - Charge dropped (Read 140 times)

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Martha Stewart - Charge dropped
« on: Feb 27^th, 2004, 11:05am »

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One of Martha charges dismissed

Stewart still faces charges of obstruction of justice and making false statements.
February 27, 2004: 11:59 AM EST

NEW YORK (CNN/Money) - The judge in the Martha Stewart trial has dismissed the securities fraud charge against her, saying prosecutors had failed to present sufficient evidence to allow the jury to decide the matter.

Stewart and her co-defendant and former stockbroker, Peter Bacanovic, still face charges of obstruction of justice, making false statements, and conspiracy.

U.S. District Judge Miriam Goldman Cedarbaum announced the dismissal in court Friday morning. She had called the securities charge "novel" earlier during the trial.

Securities fraud was the most serious charge against Stewart, carrying a penalty of up to 10 years in prison.

That charge had accused Stewart of using her proclamation of innocence as a move to mislead investors in her company, Martha Stewart Living Omnimedia (MSO: Research, Estimates). That stock tumbled after questions about Stewart's sale of ImClone sales surfaced last summer.

An early draft from the judge of her instructions to the jury had suggested to some observers that she was leaning against dismissing any of the charges.

Stewart's lawyers were hoping to have the charges tossed before the case goes to the jury next week.

Stewart and Bacanovic face obstruction of justice charges involving their statements to investigators after Stewart sold shares of ImClone Systems stock in December of 2001, the day before bad news about the biotech firm's key drug sent the stock plunging.

Bacanovic was broker to both Stewart and ImClone founder Sam Waksal, whose family was also selling shares that day.

Stewart and Bacanovic told investigators that Stewart's sale of nearly 4,000 shares was due to an arrangement to sell once shares fell to $60, but Bacanovic's former assistant testified that the broker told him to alert Stewart to Waksal's sale.

Waksal is serving a seven-year prison term after pleading guilty to securities fraud over his family's sale of the ImClone shares.

Neither Stewart nor Bacanovic testified at the trial -- the most closely watched case so far involving corporate executives accused of wrongdoing.

The defense rested its case Wednesday, and there was no action Thursday. Final arguments are scheduled for early next week.

Meanwhile, prosecutors and defense lawyers met privately with Judge Cedarbaum earlier Friday to discuss the instructions she will give to the jury when she gives them the case next week.

Those instructions are themselves a matter of contention between the two sides because of how they can shape a jury's debate.

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Re: Martha Stewart - Charge dropped
« Reply #1 on: Feb 27^th, 2004, 12:27pm »

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Judge Tosses Charge Against Martha Stewart
(Friday, February 27 09:22 AM)

LOS ANGELES (Zap2it.com) - The judge in Martha Stewart's trial threw out the most serious charge against her Friday (Feb. 27) before the case goes to the jury.

Stewart will still have to face the jury's verdict on four charges related to her controversial dumping of stock in a biotechnology firm, but U.S. District Judge Miriam Goldman Cedarbaum dismissed a charge of securities fraud, the AP reports. Cedarbaum says federal prosecutors had failed to show that Stewart lied about selling stock in ImClone to keep her own company, Martha Stewart Living Omnimedia, from losing value.

"The evidence and inferences the government presents are simply too weak to support a finding beyond a reasonable doubt of criminal intent," Cedarbaum says in a written opinion.

The securities fraud charge would have carried a maximum sentence of 10 years in prison and a fine of $1 million. The other charges -- conspiracy, obstruction of justice and two counts of giving false statements to investigators -- carry maximum five-year sentences and $250,000 fines.

Cedarbaum's decision comes two days after Stewart's defense team completed its case, calling only one witness. Closing arguments are set to begin Monday, with the case expected to go to the jury by Wednesday.

The case stems from Stewart's sale of about 4,000 shares of ImClone stock on Dec. 27, 2001. She has maintained that she had a standing order with broker Peter Bacanovic to sell the stock if the share price fell below $60. Prosecutors alleged that she was acting on a tip from ImClone founder Sam Waksal -- who was convicted of insider trading last year -- to sell before the Food and Drug Administration rejected a cancer drug made by ImClone.

The prosecution's rationale for the securities fraud charge was that Stewart was lying about her ImClone sale to preserve the image of her own company. She stood to lose millions of dollars if shares in Martha Stewart Living Omnimedia took a tumble.

"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's opinion says.

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