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CNN Live Today
Martha Stewart Stock Scandal
Aired June 19, 2003 - 11:00 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.
HEIDI COLLINS, CNN ANCHOR: We begin our coverage, in fact, of the Martha Stewart stock scandal with CNN's Allan Chernoff. He is joining us now live from outside that federal courthouse in Manhattan that we've been keeping our eye on all morning, anything happening, Allan?
ALLAN CHERNOFF, CNN CORRESPONDENT: Well, Heidi, what's happening is that there is a great sense of anticipation out here in front of the U.S. District Court in Lower Manhattan. Probably about 45 photographers just standing by waiting to snap a picture of Martha Stewart stepping out of a car and we are expecting her to arrive within any minute right now.
The actual pretrial hearing is scheduled for 11:30 Eastern time so it can't be too long until she does arrive, and keep in mind her lawyers actually didn't want her to show up this morning. They had asked the Judge Miriam Cedarbaum to allow Martha Stewart to avoid coming to court today but Ms. Cedarbaum said that in fact Martha Stewart would have to appear in court even though today is pretty much just a procedural hearing.
They'll be talking about time needed for discovery, preparation for the case, and then they'll perhaps be setting some dates, dates to receive motions and possibly a trial date for Martha Stewart.
Keep in mind she is charged with obstruction of justice and conspiracy to obstruct, as well as securities fraud. She and her stockbroker, Peter Bacanovic, have pled innocent to all of those charges and Ms. Stewart has said that she will clear her name in court - Heidi.
COLLINS: Allan, just kind of a side note that I'm curious about. We know that her lawyers, as you just mentioned, had asked that she not even show up for this proceeding but the other proceedings that we've seen she has come in her car right to the very front of the courthouse where the cameras are. Any chance this could be different she'd go in a back door or something today?
CHERNOFF: Well, Heidi, there are actually two doors to this federal courthouse, one right behind me which is the north side, and then there's the south side but the south side ever since 9/11 that street has been blocked off entirely, so there is no through traffic over there.
If she's going to drive up, she pretty much has to drive down the block right behind me. If she wants to walk she certainly can walk, take the subway, and walk into that southern entrance. I can assure you that we have cameras there as well.
COLLINS: And, Allan, we've also been talking with Jeffrey Toobin who we should remind everyone that he is inside the courthouse. Are we looking at a limousine that could possibly be hers Allan?
CHERNOFF: Well, let's see. Well, I do see certainly a black Lincoln Town Car but it does not look to me as if there is anybody aside from the driver inside of that vehicle and there is a large black vehicle behind but, no, I don't see any sign of her just yet.
COLLINS: OK.
CHERNOFF: High anticipation though.
COLLINS: High anticipation indeed. Let's go ahead and talk for just a moment if we could, Allan, about these charges against her. You have already mentioned them. I'll just remind everyone, conspiracy to obstruct justice, making false statements, committing perjury, securities fraud, and in speaking with Jeffrey Toobin a little bit later, he really pointed to the securities fraud as being the most unusual charge. What's your feeling on all of that?
CHERNOFF: Well, that's entirely correct and that's what virtually every single attorney looking at this case has been saying because the federal prosecutors were thinking about charging Martha Stewart with insider trading but they decided not to.
Only on the civil side did they charge her with insider trading that being the Securities and Exchange Commission and that related to her actual sale of the ImClone stock.
The criminal securities fraud charge relates to shares of her own company stock, Martha Stewart Living Omnimedia and the government is saying that by having lied, allegedly lied, about the reason that she sold her ImClone stock she was trying to artificially support the price of Martha Stewart Living Omnimedia. Obviously, Martha Stewart has a big chunk of that stock and, in fact, she has a controlling interest in the stock.
COLLINS: Now, Peter Bacanovic he, actually there are some charges against him as well, her partner so to speak. Talk to us a little bit about that and the situation there as it stands, Allan.
CHERNOFF: Peter Bacanovic is the stockbroker, and I think my cameraman is actually turning around and here we go.
HEIDI: There we go.
CHERNOFF: As you can see and yet another umbrella coming out. This is her and you see her right from behind walking out, a slightly different tan umbrella from the one she was wearing last time.
And she actually appears to be, yes, walking right by a driveway and now into the entrance of the U.S. District Courthouse here in southern Manhattan so arriving just about 22 minutes prior. That is her chief attorney, Robert Morvillo, trailing the pack over there and very quickly stepping into the courthouse here in Lower Manhattan.
As we said, she is scheduled to appear before Judge Cedarbaum at 11:30 Eastern time, so just a little bit more than 20 minutes from now and quite heavy traffic as you can see behind me but clearly no problem for Martha Stewart stepping right inside of the court.
HEIDI: It's a little bit like a really good meal that you prepare for hours and hours and then boom it's over, right Allan?
CHERNOFF: That's right. Well, I can assure you that all of our cameramen and our technical operators here have been on the scene, in fact preparing since before 7:00 a.m. Eastern time this morning, so I would imagine you could say that they, in fact, have been working longer than Martha Stewart perhaps would be working in the kitchen prior a preparation of lunch, certainly longer than preparation of breakfast.
COLLINS: I would imagine so and, Allan, I got one last question for you as we take a look one more time at Martha Stewart's arrival there at the courthouse.
Just wondering, you know, we have seen and we've been talking all morning about the unbelievable amount of media attention and all of the cameramen that are there and reporters as well.
But I have seen a couple of signs from people standing by sort of protesting what's going on today. What is your sense of the support from the people? Are there a lot of people out there or just a couple that you can see?
CHERNOFF: Well, we're panning to show you right now. In fact, there are actually two people and you see them just to the side of all the cameramen over here. One of the signs says "Stop persecution of Martha Stewart." The other sign says, "Martha Stewart is a good thing," a bit of a takeoff on Martha Stewart's favorite saying, it's a good thing.
Anyway, so only two people right over here so perhaps Martha Stewart has been receiving thousands and thousands of e-mails on her website, marthatalks.com, but in terms of the physical presence here right outside of court only two hardcore loyal supporters did show up at least with signs to display their displeasure with the government's charges against Ms. Stewart.
COLLINS: Allan Chernoff thanks so much for the play-by-play. We certainly o appreciate it. Once again, Martha Stewart expected to appear before Judge Cedarbaum there at the Manhattan Courthouse, expected to be at 11:30 about 20 minutes or so from now.
Our CNN Legal Analyst Jeffrey Toobin is inside that courthouse, no cameras allowed because, of course, it is a federal courthouse. He will report to us when this proceeding is over and let us know what happened.
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 19, 2003 - 11:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
HEIDI COLLINS, CNN ANCHOR: We begin our coverage, in fact, of the Martha Stewart stock scandal with CNN's Allan Chernoff. He is joining us now live from outside that federal courthouse in Manhattan that we've been keeping our eye on all morning, anything happening, Allan?
ALLAN CHERNOFF, CNN CORRESPONDENT: Well, Heidi, what's happening is that there is a great sense of anticipation out here in front of the U.S. District Court in Lower Manhattan. Probably about 45 photographers just standing by waiting to snap a picture of Martha Stewart stepping out of a car and we are expecting her to arrive within any minute right now.
The actual pretrial hearing is scheduled for 11:30 Eastern time so it can't be too long until she does arrive, and keep in mind her lawyers actually didn't want her to show up this morning. They had asked the Judge Miriam Cedarbaum to allow Martha Stewart to avoid coming to court today but Ms. Cedarbaum said that in fact Martha Stewart would have to appear in court even though today is pretty much just a procedural hearing.
They'll be talking about time needed for discovery, preparation for the case, and then they'll perhaps be setting some dates, dates to receive motions and possibly a trial date for Martha Stewart.
Keep in mind she is charged with obstruction of justice and conspiracy to obstruct, as well as securities fraud. She and her stockbroker, Peter Bacanovic, have pled innocent to all of those charges and Ms. Stewart has said that she will clear her name in court - Heidi.
COLLINS: Allan, just kind of a side note that I'm curious about. We know that her lawyers, as you just mentioned, had asked that she not even show up for this proceeding but the other proceedings that we've seen she has come in her car right to the very front of the courthouse where the cameras are. Any chance this could be different she'd go in a back door or something today?
CHERNOFF: Well, Heidi, there are actually two doors to this federal courthouse, one right behind me which is the north side, and then there's the south side but the south side ever since 9/11 that street has been blocked off entirely, so there is no through traffic over there.
If she's going to drive up, she pretty much has to drive down the block right behind me. If she wants to walk she certainly can walk, take the subway, and walk into that southern entrance. I can assure you that we have cameras there as well.
COLLINS: And, Allan, we've also been talking with Jeffrey Toobin who we should remind everyone that he is inside the courthouse. Are we looking at a limousine that could possibly be hers Allan?
CHERNOFF: Well, let's see. Well, I do see certainly a black Lincoln Town Car but it does not look to me as if there is anybody aside from the driver inside of that vehicle and there is a large black vehicle behind but, no, I don't see any sign of her just yet.
COLLINS: OK.
CHERNOFF: High anticipation though.
COLLINS: High anticipation indeed. Let's go ahead and talk for just a moment if we could, Allan, about these charges against her. You have already mentioned them. I'll just remind everyone, conspiracy to obstruct justice, making false statements, committing perjury, securities fraud, and in speaking with Jeffrey Toobin a little bit later, he really pointed to the securities fraud as being the most unusual charge. What's your feeling on all of that?
CHERNOFF: Well, that's entirely correct and that's what virtually every single attorney looking at this case has been saying because the federal prosecutors were thinking about charging Martha Stewart with insider trading but they decided not to.
Only on the civil side did they charge her with insider trading that being the Securities and Exchange Commission and that related to her actual sale of the ImClone stock.
The criminal securities fraud charge relates to shares of her own company stock, Martha Stewart Living Omnimedia and the government is saying that by having lied, allegedly lied, about the reason that she sold her ImClone stock she was trying to artificially support the price of Martha Stewart Living Omnimedia. Obviously, Martha Stewart has a big chunk of that stock and, in fact, she has a controlling interest in the stock.
COLLINS: Now, Peter Bacanovic he, actually there are some charges against him as well, her partner so to speak. Talk to us a little bit about that and the situation there as it stands, Allan.
CHERNOFF: Peter Bacanovic is the stockbroker, and I think my cameraman is actually turning around and here we go.
HEIDI: There we go.
CHERNOFF: As you can see and yet another umbrella coming out. This is her and you see her right from behind walking out, a slightly different tan umbrella from the one she was wearing last time.
And she actually appears to be, yes, walking right by a driveway and now into the entrance of the U.S. District Courthouse here in southern Manhattan so arriving just about 22 minutes prior. That is her chief attorney, Robert Morvillo, trailing the pack over there and very quickly stepping into the courthouse here in Lower Manhattan.
As we said, she is scheduled to appear before Judge Cedarbaum at 11:30 Eastern time, so just a little bit more than 20 minutes from now and quite heavy traffic as you can see behind me but clearly no problem for Martha Stewart stepping right inside of the court.
HEIDI: It's a little bit like a really good meal that you prepare for hours and hours and then boom it's over, right Allan?
CHERNOFF: That's right. Well, I can assure you that all of our cameramen and our technical operators here have been on the scene, in fact preparing since before 7:00 a.m. Eastern time this morning, so I would imagine you could say that they, in fact, have been working longer than Martha Stewart perhaps would be working in the kitchen prior a preparation of lunch, certainly longer than preparation of breakfast.
COLLINS: I would imagine so and, Allan, I got one last question for you as we take a look one more time at Martha Stewart's arrival there at the courthouse.
Just wondering, you know, we have seen and we've been talking all morning about the unbelievable amount of media attention and all of the cameramen that are there and reporters as well.
But I have seen a couple of signs from people standing by sort of protesting what's going on today. What is your sense of the support from the people? Are there a lot of people out there or just a couple that you can see?
CHERNOFF: Well, we're panning to show you right now. In fact, there are actually two people and you see them just to the side of all the cameramen over here. One of the signs says "Stop persecution of Martha Stewart." The other sign says, "Martha Stewart is a good thing," a bit of a takeoff on Martha Stewart's favorite saying, it's a good thing.
Anyway, so only two people right over here so perhaps Martha Stewart has been receiving thousands and thousands of e-mails on her website, marthatalks.com, but in terms of the physical presence here right outside of court only two hardcore loyal supporters did show up at least with signs to display their displeasure with the government's charges against Ms. Stewart.
COLLINS: Allan Chernoff thanks so much for the play-by-play. We certainly o appreciate it. Once again, Martha Stewart expected to appear before Judge Cedarbaum there at the Manhattan Courthouse, expected to be at 11:30 about 20 minutes or so from now.
Our CNN Legal Analyst Jeffrey Toobin is inside that courthouse, no cameras allowed because, of course, it is a federal courthouse. He will report to us when this proceeding is over and let us know what happened.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
