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Wednesday, January 28, 2004

Snow Causes Break in Martha Stewart Trial, Westport Friend to Testify

The snowstorm that rolled into New York and Westport forced a one-day postponement today in the stock fraud trial of Westport’s Martha Stewart.

During opening arguments Tuesday in a packed courtroom in Manhattan, Stewart was branded a liar by federal prosecutors.

But her lawyer defended her as a self-made businesswoman facing criminal charges based on nothing more than speculation and guesswork.

Stewart was seated at the front of a packed courtroom and, wearing an olive-colored pantsuit, listened intently as federal prosecutor Karen Patton Seymour and defense attorney Robert Morvillo delivered their opening statements.

The initial salvos from both sides featured detailed descriptions of Stewart’s financial situation, from her three brokerage accounts to her need to sell some stock at a loss in late 2001 to offset the capital gains from other trades.

There were also mentions of witnesses who will testify, including Mariana Pasternak, a Westport real estate agent and estranged wife of Westport vascular surgeon Bart Pasternak.

Mariana Pasternak was a passenger on Stewart’s plane during a refueling stop in Texas when Stewart called in her order to sell ImClone stock the transaction that led to her legal troubles—and whom Seymour described as “her best friend.”

Seymour, who addressed the jury of eight women and four men first, said Stewart’s reputation and the stock price of her multimedia company would have been severely damaged if the truth surfaced about an illegal inside tip from her broker.

The prosecutor said Stewart and Peter Bacanovic, her former Merrill Lynch broker and a co-defendant in the case, chose “to lie to investigators and come up with a cover up, a false story” about the sale of shares in ImClone Systems Inc.

“Martha Stewart was central to the success of her company,” Seymour said, telling jurors that Stewart stood to lose some $30 million if the stock price collapsed.

The prosecutor said Stewart tried to mislead investors about the trade in order to halt the growing storm of negative publicity.

“All of this was designed to lift that dark cloud hanging over her reputation ... she was determined to put her own interest in front of investors.”

Stewart’s attorney, Morvillo, responded by telling jurors in his opening statement that prosecutors based their case on “speculation, surmise and guesswork” drawn from circumstantial evidence.

“There will be no direct evidence introduced by the government that Martha Stewart conspired to obstruct anything,” Morvillo said as Stewart’s mother, daughter, sister and friends watched from the first few rows of the courtroom.

“No witness will appear in this courtroom during the trial to say ‘Martha told me to do something unlawful.”’

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Posted 01/28/04 at 05:02 AM  Permalink



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