View Full Version : Martha Stewart Found Guilty

05-03-04, 20:56
Stewart convicted on all charges

Jury finds style maven, ex-broker guilty of obstructing justice and lying to investigators.

March 5, 2004: 3:53 PM EST

NEW YORK (CNN/Money) - A jury found Martha Stewart guilty on all charges in her obstruction of justice trial Friday and the former stockbroker and homemaker turned style setter is expected to go to prison.

Her ex-broker Peter Bacanovic was found guilty on four of the five charges he faced.

Neither defendant appeared to show any emotion as the verdict was read, while the lead prosecutor seemed to be holding back tears of joy. Sentencing was set for June 17.

The panel of eight women and four men began deliberating Wednesday on whether Stewart and her ex-broker, Peter Bacanovic, obstructed justice and lied to the government about her sale of ImClone Systems Inc. stock in December 2001.

Stewart, 62, was found guilty of conspiracy, obstruction of justice and two counts of making false statements charges that together carry a penalty of up to 20 years in prison.
Bacanovic, 41, was convicted of making false statements, conspiracy, perjury and obstruction of justice with a maximum prison term of 25 years. He was acquitted on a charge of making and using false documents.

Both Stewart and Bacanovic left the courthouse without speaking to reporters. Eyewitnesses said Stewart's daughter Alexis was crying.

Stewart said on her Web site that she would appeal. (For more on Stewart's statement, click here).

But she may still end up going to prison.

"Unless this is somehow undone on appeal, she's a felon and she's going to prison," legal analyst Kendall Coffey said.

The stock of the company she founded, Martha Stewart Living Omnimedia (MSO: down $3.26 to $10.77, Research, Estimates), tumbled after the verdict was announced.

The conviction came exactly a week after the judge threw out the most serious charge against Stewart, securities fraud, which carried a maximum penalty of 10 years in prison and a $1 million fine.

One juror interviewed after the verdict said: "This is a victory for the little guys....no one is above the law."

The juror, a man who declined to give his name, said Stewart's assistant, Anne Armstrong, and her friend, Marianna Pasternak, presented the strongest testimony.

He said the presence of celebrities in the courtroom who came to support Stewart, including Bill Cosby and Rosie O'Donnell, did not sway the jurors. "Not at all," he said.

Despite the intense publicity surrounding the trial the most closely watched of the recent corporate fraud cases the stock trade at its center involved a relatively small amount of money.

Prosecutors argued that Stewart sold her ImClone stock only after Bacanovic told his assistant to tip her off that ImClone founder Sam Waksal was trying to sell. Stewart and Bacanovic had told investigators they had an arrangement to sell once the stock fell to $60.

Bacanovic was broker to both Stewart and Waksal, who is serving a seven-year prison term after pleading guilty to securities fraud over his family's sale of ImClone shares.

The government's star witness in the case, Douglas Faneuil, Bacanovic's former assistant, testified that his boss ordered him to pass an inside tip about ImClone to Stewart.

CNN (http://money.cnn.com/2004/03/05/news/companies/martha_verdict/index.htm?cnn=yes)

[ 05. March 2004, 20:58: Message edited by: laracroft8290 ]

05-03-04, 21:16