NEW YORK - Someone lied, attorneys on both sides of the Martha Stewart stock trial agreed yesterday. But who?
The celebrated diva of all things domestic, desperate to protect a fortune built around her image of perfection? Her stockbroker, eager to tip off his famous client and reverse losses elsewhere in her portfolio? Or the stockbroker's assistant, an All About Eve underling who saw an opening for personal advancement and took it?
The month-long trial of Stewart, charged with lying to federal investigators about the timing of her sale of stock in ImClone Systems, headed into its final lap yesterday as attorneys began their closing arguments in the case before it goes to the jury for deliberation and its verdict.
Today, Stewart's attorney, Robert Morvillo, will give his summation, and, after instructions from U.S. District Judge Miriam Goldman Cedarbaum, the jury could begin deliberations as soon as tomorrow.
Assistant U.S. Attorney Michael Schachter outlined what he called a series of lies that Stewart and co-defendant Peter Bacanovic, her Merrill Lynch stockbroker, told about her sale of stock in ImClone Systems, a biotech company, on Dec. 27, 2001.
"Martha Stewart thought she would not get caught," Schachter said. "Martha Stewart and Peter Bacanovic were wrong."
That morning, Sam Waksal, the owner of the company and a close friend of Stewart, tried to dump his own stock, a day before the Food and Drug Administration was to announce that it was rejecting ImClone's application for approval of its experimental anti-cancer drug.
The announcement was expected to send ImClone's stock price plummeting, and Waksal is now serving a prison term for insider trading.
Schachter said Bacanovic, who was also Waksal's stockbroker, tipped off Stewart that the ImClone chief was dumping his shares, and she followed suit that afternoon. The defendants have maintained that they had a pre-existing agreement to sell the stock if its price dropped below $60, and that is why Stewart sold her shares that day.
After the fact
But Schachter suggested that Stewart and Bacanovic invented this agreement after the fact and that she actually sold because she was told of Waksal's dumping. In fact, Schachter said, when Merrill Lynch launched an internal investigation about the flurry of ImClone trading on Dec. 27, Bacanovic didn't explain Stewart's sale by bringing up the alleged pre-existing agreement.
