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Martha Stewart Wins Legal Victory

Martha Stewart won a legal victory today with a federal court judge ruling that prosecutors may not use an e-mail she wrote to her lawyer last year as evidence at her forthcoming trial on insider trading-related charges.

U.S. District Court Judge Miriam Goldman Cedarbaum ruled the Westport resident did not waive the e-mail’s protected status when she forwarded it to her daughter, Alexis, a day after sending it to her attorney.

The e-mail, dated June 23, 2002, contains Stewart’s account of why she sold ImClone Systems stock in late 2001. The sale was under investigation in 2002, and Stewart was later indicted on five criminal counts.

A federal prosecutor came across the e-mail earlier this year in preparation for Stewart’s trial, scheduled for Jan. 12, and asked the judge to clarify whether it could be used as evidence.

Cedarbaum ruled the e-mail deserved the legal protection of attorney work product —a designation that means the government cannot use it as evidence at her trial.

The judge said the e-mail does not disclose Stewart’s legal strategy, but she rejected the government’s argument that the e-mail “would have taken the same form if created for a nonlitigation purpose.”

In an affidavit, Stewart called her daughter “the closest person in the world to me.”

“She is a valued confidante and counselor to me,” Stewart said. “In sharing the e-mail with her, I knew that she would keep its content strictly confidential.”

The government says Stewart sold ImClone shares on Dec. 27, 2001, because she was tipped that the family of ImClone founder Sam Waksal, a Stewart friend, was trying to sell its shares.

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