Jury selection under way in Martha Stewart trial
By Leon Lazaroff
Tribune national correspondent
NEW YORK -- After months of anticipation, the securities fraud trial of Martha Stewart began in earnest at a federal courthouse in Manhattan Tuesday.
Appearing relaxed and wearing a brown wool pants suit, Stewart arrived just before 10 a.m. She smiled at supporters and acknowledged the nearly 100 members of the media who crowded in the cold behind a police barricade that stretched a city block.
Inside the courtroom, U.S. District Judge Miriam Goldman Cedarbaum got right to the point.
"Ms. Stewart, how do you plead on count No. 1," Cedarbaum asked the founder and largest shareholder of Martha Stewart Living Omnimedia Inc., the domestic arts publishing and consumer products company.
"Not guilty," said Stewart, reiterating her earlier plea.
The same question-and-answer process was repeated four times for counts that included conspiracy, obstruction of justice and securities fraud. The charges stem from Stewart's December 2001 sale of almost 4,000 shares in ImClone Systems Inc., a New York biotech company.
Nearby, Stewart's stockbroker and co-defendant Peter Bacanovic, formerly of Merrill Lynch & Co., sat with his lawyers. Bacanovic also pleaded not guilty to charges of conspiracy, perjury and making false statements.
Cedarbaum last week took the extraordinary step of blocking press access to jury selection. She cited the potentially "chilling effect" the presence of the media could have on prospective jurors when they answer questions from attorneys for all the parties.
Prospective jurors, numbering about 35, were individually called to a private room where lawyers for the government, Stewart and Bacanovic gathered with Cedarbaum.
Earlier, Cedarbaum said jury selection would probably last the rest of the week, and that opening statements most likely would begin on Monday.
The knowledge that testimony would soon begin was not expected to slow Stewart's efforts to win over a public that has fluctuated between adoring and despising the can-do homemaker who remains chief executive of the company she founded 20 years ago.
"When you have a trial of this sort of stature and magnitude, it's not unlike a political campaign," said Judy Leon, a media adviser with the litigation consulting firm DecisionQuest. "Martha Stewart has a very compelling case to tell. How well her people tell this story outside the courtroom is important for her life after the trial, even if it doesn't influence the outcome."
Stewart denies she sold her ImClone stock based on advanced word of a negative report from the Food and Drug Administration about the company's key cancer drug.
ImClone's founder, Samuel Waksal, a friend of Stewart, pleaded guilty last year to securities fraud after admitting he sold company stock after receiving early notice of the FDA report. Once the report was released on Dec. 28, 2001, ImClone stock fell 15.9 percent the next day, closing at $46.46. Waksal is serving a seven-year prison sentence.
Stewart maintains she had a pre-existing arrangement with Bacanovic to sell her ImClone stock when it fell to $60. On Dec. 27, Stewart sold her 3,928 shares of ImClone at an average of about $58.43.
Observers say a critical point in the proceeding, which is expected to last about six weeks, could come when Bacanovic's assistant, Douglas Faneuil, is called to testify.
The government charges that Bacanovic told Faneuil to alert Stewart that Waksal and his family were selling millions of their ImClone shares in the wake of the FDA report.
Stewart's lawyers are expected to go hard at Faneuil, 28, who has pleaded guilty to a misdemeanor charge in the case and is cooperating with the government.
After falling as low as $5.24 in September 2002, ImClone shares closed Tuesday at $42.39 a share.
What do you think the outcome of this trial will be? What do you think is SHOULD be?
Personally, I think that she's guilty as can be. She deserves to get a serious punishment.
What she did was extremely wrong... and she knew that.
Does she deserve jail time? YES! Anyone else would have gotten it....
and I'm truly sick and tired of "stars" getting away with everything they do, but joe schmoe, down the street, get's hit hard with a sentence.
Did you know she could be in jail up to 30 years if she's found guilty? I didn't know how serious this crime was!
To be honest, I would have done the same thing, but not know it was insider trading. When I learned of her case, I did research to find out about the stock market laws, as I have shares for my own company.
The reason I haven't done anything with my shares yet is because I don't know what I'm doing. I'm a new company that is privately owned, and I'm going one step at a time. It's a "learn as you go". Ron can vouche for this as I have to research before I act.
Good thing I have a mentor company working with me, but I honestly did not know what Martha did was illegal and could have made the very same mistake trying to raise capital for my company.
I'm not in a rush to get my company to the public, and may never do it. I feel like I'm getting a better education than college could offer me, just by doing it, and learning as I go.
It will be interesting to see how they come up with a jury of her peers. How can they be her peers when she far exceeds their networth? Can they really look at her and judge fairly, knowing they do not have the funds this woman has, or ever will have?
Can they find 12 people that don't know who she is?
The only way I would risk a jury trial is if I was not guilty. I would not take a plea bargain if I was not guilty, ever, period! To me, that's admitting guilt. So she either asked for a jury trial because she's actually innocent, or because she thinks she can snow a jury.
Have you seen the fake questionaire to find a jury of her peers ?
...........
Martha Stewart Faux Jury Questionaire
Page 1
1. Have you ever used a glue gun?
2. What is a caper? (Choose one):
a. a planned illegal activity, typically involving theft.
b. a pickled delicacy made from the buds of a bush grown in the Mediterranean region.
3. What should never be placed on a coffee table when guests arrive? (Choose one):
a. drink glasses without coasters.
b. the K-Mart mail order catalog.
c. bare feet.
4. When using beans in a recipe:
a. do you use fresh or canned?
b. if fresh, do you soak the beans in water or chicken broth?
c. if you use broth, is it canned or homemade?
d. if homemade, was the chicken free range and did you slaughter it yourself?
5. In what month should tulip bulbs be planted?
6. When storing towels, do you fold them or roll them? If rolled, do you tie them with a ribbon before guests arrive?
7. Have you ever received an e-mail message offering extra-virgin olive oil? If so, did you reply?
That's too cute!!!