Return to Transcripts main page
CNN Live Today
Indictment Expected in Martha Stewart Case
Aired June 04, 2003 - 10:07 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LEON HARRIS, CNN ANCHOR: Martha Stewart is in the media spotlight this morning, but not for a TV appearance. The domestic diva could face indictment on an insider trading scandal as early as today. And if that happens, Stewart says that she is prepared to fight the charges.
CNN's Allan Chernoff joins us now. He is standing by outside the federal courthouse in New York with the very latest on this -- Allan.
ALLEN CHERNOFF, CNN FINANCIAL NEWS: Leon, good morning.
I just got off the line with the public affairs director of the U.S. attorney's office here in Manhattan, and he said, "Check back in about 45 minutes." I said, 'Does that mean we're wasting our time out here in the rain?' And he said, "If that were the case, we would let you know."
So, we certainly do have the impression that later today there very well may be an indictment against Martha Stewart. It seems at this stage the only thing that can prevent that is a last-minute plea bargain between Martha Stewart and the federal prosecutors. But at this late hour that appears highly unlikely.
(BEGIN VIDEOTAPE)
CHERNOFF (voice-over): What first appeared to be an awkward step in mud for Martha Stewart has turned into legal quicksand. Federal prosecutors have warned they're going to ask a grand jury to indict her as early as this week, and the Securities and Exchange Commission has warned it will bring a civil complaint.
Her lawyer released a statement, saying Stewart would hang tough -- quote, "If Martha Stewart is indicted, she intends to declare her innocence and proceed to trial."
This is not what Martha Stewart expected when she unloaded nearly 4,000 shares of ImClone Systems, a company founded by her friend, Sam Waksal. Stewart sold the stock one day before the food and Drug Administration rejected ImClone's application for review of its cancer drug. After Waksal was charged with insider trading on the stock, Stewart said: "I had no improper information. My transaction was entirely lawful."
And on a CBS television segment, she brushed the issue off.
MARTHA STEWART, MARTHA STEWART LIVING OMNIMEDIA: As I said, I think this will all be resolved in the very near future, and I will be exonerated of any ridiculousness.
CHERNOFF: Instead, prosecutors kept digging. They gained the cooperation of Doug Faneuil, former assistant to the Merrill Lynch broker that Stewart and Waksal shared.
Legal experts say prosecutors may be trying to make an example of Martha Stewart.
JOHN COFFEE, COLUMBIA UNIVERSITY LAW SCHOOL: This is very atypical. In this case, the government is pushing the envelope on what constitutes insider trading further than they've ever pushed it before. And I think it's partly because they have the kind of high- profile person who, in this post-Enron world, the government wants to clearly communicate is not above the law.
(END VIDEOTAPE)
CHERNOFF: So, it appears Martha Stewart may soon be fighting criminal charges. Her friend, Sam Waksal, actually pled guilt to insider trading, and he's scheduled to be sentenced next Tuesday -- Leon.
HARRIS: Well, if the feds were looking for someone to make an example with, they picked the right person, because everybody is paying attention to this case. Thanks, Allan -- Allan Chernoff outside the courthouse here in New York, the federal courthouse. And Allan will be there for the morning, and he'll check back with us if he hears something new there.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.
Aired June 4, 2003 - 10:07 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LEON HARRIS, CNN ANCHOR: Martha Stewart is in the media spotlight this morning, but not for a TV appearance. The domestic diva could face indictment on an insider trading scandal as early as today. And if that happens, Stewart says that she is prepared to fight the charges.
CNN's Allan Chernoff joins us now. He is standing by outside the federal courthouse in New York with the very latest on this -- Allan.
ALLEN CHERNOFF, CNN FINANCIAL NEWS: Leon, good morning.
I just got off the line with the public affairs director of the U.S. attorney's office here in Manhattan, and he said, "Check back in about 45 minutes." I said, 'Does that mean we're wasting our time out here in the rain?' And he said, "If that were the case, we would let you know."
So, we certainly do have the impression that later today there very well may be an indictment against Martha Stewart. It seems at this stage the only thing that can prevent that is a last-minute plea bargain between Martha Stewart and the federal prosecutors. But at this late hour that appears highly unlikely.
(BEGIN VIDEOTAPE)
CHERNOFF (voice-over): What first appeared to be an awkward step in mud for Martha Stewart has turned into legal quicksand. Federal prosecutors have warned they're going to ask a grand jury to indict her as early as this week, and the Securities and Exchange Commission has warned it will bring a civil complaint.
Her lawyer released a statement, saying Stewart would hang tough -- quote, "If Martha Stewart is indicted, she intends to declare her innocence and proceed to trial."
This is not what Martha Stewart expected when she unloaded nearly 4,000 shares of ImClone Systems, a company founded by her friend, Sam Waksal. Stewart sold the stock one day before the food and Drug Administration rejected ImClone's application for review of its cancer drug. After Waksal was charged with insider trading on the stock, Stewart said: "I had no improper information. My transaction was entirely lawful."
And on a CBS television segment, she brushed the issue off.
MARTHA STEWART, MARTHA STEWART LIVING OMNIMEDIA: As I said, I think this will all be resolved in the very near future, and I will be exonerated of any ridiculousness.
CHERNOFF: Instead, prosecutors kept digging. They gained the cooperation of Doug Faneuil, former assistant to the Merrill Lynch broker that Stewart and Waksal shared.
Legal experts say prosecutors may be trying to make an example of Martha Stewart.
JOHN COFFEE, COLUMBIA UNIVERSITY LAW SCHOOL: This is very atypical. In this case, the government is pushing the envelope on what constitutes insider trading further than they've ever pushed it before. And I think it's partly because they have the kind of high- profile person who, in this post-Enron world, the government wants to clearly communicate is not above the law.
(END VIDEOTAPE)
CHERNOFF: So, it appears Martha Stewart may soon be fighting criminal charges. Her friend, Sam Waksal, actually pled guilt to insider trading, and he's scheduled to be sentenced next Tuesday -- Leon.
HARRIS: Well, if the feds were looking for someone to make an example with, they picked the right person, because everybody is paying attention to this case. Thanks, Allan -- Allan Chernoff outside the courthouse here in New York, the federal courthouse. And Allan will be there for the morning, and he'll check back with us if he hears something new there.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.
