Nation & World

Closing arguments due next week

Martha Stewart enters Manhattan federal court in New York on Feb 24.
Lawyers in the Martha Stewart trial will deliver their closing arguments early next week, and 12 jurors will begin deciding the fate of the celebrity homemaker Wednesday morning.

U.S. District Judge Miriam Goldman Cedarbaum set the schedule after Stewart's lawyers presented a defense that took less than an hour -- and did not include an appearance on the witness stand by Stewart herself.

The only witness on Stewart's behalf Wednesday was Steven Pearl, a lawyer who took notes in her Feb. 4, 2002, interview with federal prosecutors and securities regulators.

The government claims Stewart lied repeatedly that day, including saying she did not know whether there was a record that stockbroker Peter Bacanovic had left her a message on Dec. 27, 2001, the day she sold ImClone Systems stock.

But Pearl's scribbled notes show Stewart may have been responding instead to a question about what time Bacanovic called her that day.

Under cross-examination by prosecutors, Pearl admitted that his notes were incomplete and that there may have been a question about the message log he did not write down.

Referring to his notes and a memo he prepared after the interview, Pearl said: "Neither one is a verbatim transcript."

There was no court reporter or tape recorder in the interview, and the government relied on the notes of an FBI agent who was present to charge Stewart with lying.

Lawyers for Bacanovic also rested their case Wednesday morning. They called five witnesses over three days.

Neither Stewart nor the broker took the witness stand. Their lawyers are gambling instead that jurors will decide the government simply has not met its burden of proof beyond a reasonable doubt.

The government claims Stewart sold her 3,928 ImClone shares because she was tipped that ImClone CEO Samuel D. Waksal was frantically trying to sell his own. A negative report related to an ImClone cancer drug soon sent the stock tumbling.

Stewart and Bacanovic claim they had made a plan before Stewart sold to get rid of the shares if ImClone's stock price fell below $60. Prosecutors say that was simply a cover story.

Cedarbaum excused jurors for the week and told them to return for closing arguments Monday and Tuesday. They will receive instructions from the judge Wednesday, then begin their deliberations.

"Now is the time that it's particularly important for you to continue to keep an open mind, until you have heard the closing arguments and my instructions on the law," the judge said.

Cedarbaum still has not decided whether to throw out any of the charges in the case.

She has focused some of her attention in court on whether she should dismiss the securities fraud charge against Stewart -- a count the judge herself has called "novel."

That count accuses Stewart of deceiving investors in her own company, Martha Stewart Living Omnimedia, by claiming in 2002 that she sold ImClone stock because of the $60 agreement.