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Martha Stewart on Trial

Aired February 23, 2004 - 11:16   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.


DARYN KAGAN, CNN ANCHOR: Martha Stewart's lawyers ask a judge to throw out some of the charges against their client. The judge says the ruling will come today. CNN financial correspondent Mary Snow is following developments at the courthouse in lower Manhattan.
Good morning again, Mary.

MARY SNOW, CNN CORRESPONDENT: Good morning, Daryn.

Yes, the judge in this case saying that she's withheld judgment for now after lawyers presented their arguments to her on why she should drop some of the charges against the defendant, specifically attorneys focused on that conspiracy charge, both against Martha Stewart and her co-defendant, former stockbroker Peter Bacanovic. These arguments were presented while the jury was not in the courtroom.

Now both sides are closely watching what the judge will do, because they say it could determine the defense strategy. Officially, the defense is saying they haven't decided whether or not Martha Stewart or Peter Bacanovic will testify.

However, sources close to the defense say that they are leaning toward not putting the defendants on the stand, but yet it is not 100 percent sure. But, they say, also that if they do not testify, that the defense could wrap up as early as this week.

Now, when the jurors were brought in, the defense continued its case, attorneys for Peter Bacanovic calling the first attorney for Douglas Faneuil, the government's star witness. He is Jeremiah Gutman. He is joining me right now.

Mr. Gutman, thank you for joining us.

JEREMIAH GUTMAN, DEFENSE WITNESS: You're welcome.

SNOW: You testified on the stand that when Doug Faneuil came to you, that he was very emotional, and you said that he was afraid. Can you tell us about that?

GUTMAN: Yes, he was sobbing, he was crying, he said he was fearful.

SNOW: Who was he fearful of?

GUTMAN: I can only infer he was fearful of the people at Merrill Lynch. SNOW: Doug Faneuil in his testimony also said that you had told him he initially came and told what you his story was, and then he said that you told him not to come forward and tell a different version. He said he that had not been totally truthful. Is that accurate, that he had indicated that you basically told him to lie?

GUTMAN: That's not accurate. What happened is, he came to me and I advised him. He told me he had not told the whole truth. I told him he should immediately go to the SEC and tell the whole truth, and I recommended that he get new counsel, and I would find somebody to go with him, and that he could not trust counsel for Merrill Lynch because there was a conflict of interest. And he said he was afraid to do that and said he would not do that, and he would not do it, and he sobbed some more and talked about how terrible they were, and he didn't do it.

SNOW: And he also indicated that you had told him that there was a deal with -- that Merrill Lynch was trying to work out a deal with the government. Did Merrill Lynch ever tell you they were trying to work out a deal with the government? And did Doug Faneuil specifically said that deal would include looking the other way when it came to Martha Stewart?

GUTMAN: That isn't quite what happened. I told Faneuil, as I testified, that Marcus, the lawyer for Merrill Lynch had told me that he was attempting to work out a deal by which everyone associated with Merrill Lynch would be off the hook and the chips would fall where they may.

SNOW: Jeremiah Gutman, thank you very much for joining us this morning. And, Daryn, the defense continuing its case. Peter Bacanovic's attorneys bringing an ink expert to the stand -- Daryn.

KAGAN: All right, and we'll find out more about that as the day goes on. Mary Snow, in Manhattan, thank you.

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 February 23, 2004 - 11:16   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DARYN KAGAN, CNN ANCHOR: Martha Stewart's lawyers ask a judge to throw out some of the charges against their client. The judge says the ruling will come today. CNN financial correspondent Mary Snow is following developments at the courthouse in lower Manhattan.
Good morning again, Mary.

MARY SNOW, CNN CORRESPONDENT: Good morning, Daryn.

Yes, the judge in this case saying that she's withheld judgment for now after lawyers presented their arguments to her on why she should drop some of the charges against the defendant, specifically attorneys focused on that conspiracy charge, both against Martha Stewart and her co-defendant, former stockbroker Peter Bacanovic. These arguments were presented while the jury was not in the courtroom.

Now both sides are closely watching what the judge will do, because they say it could determine the defense strategy. Officially, the defense is saying they haven't decided whether or not Martha Stewart or Peter Bacanovic will testify.

However, sources close to the defense say that they are leaning toward not putting the defendants on the stand, but yet it is not 100 percent sure. But, they say, also that if they do not testify, that the defense could wrap up as early as this week.

Now, when the jurors were brought in, the defense continued its case, attorneys for Peter Bacanovic calling the first attorney for Douglas Faneuil, the government's star witness. He is Jeremiah Gutman. He is joining me right now.

Mr. Gutman, thank you for joining us.

JEREMIAH GUTMAN, DEFENSE WITNESS: You're welcome.

SNOW: You testified on the stand that when Doug Faneuil came to you, that he was very emotional, and you said that he was afraid. Can you tell us about that?

GUTMAN: Yes, he was sobbing, he was crying, he said he was fearful.

SNOW: Who was he fearful of?

GUTMAN: I can only infer he was fearful of the people at Merrill Lynch. SNOW: Doug Faneuil in his testimony also said that you had told him he initially came and told what you his story was, and then he said that you told him not to come forward and tell a different version. He said he that had not been totally truthful. Is that accurate, that he had indicated that you basically told him to lie?

GUTMAN: That's not accurate. What happened is, he came to me and I advised him. He told me he had not told the whole truth. I told him he should immediately go to the SEC and tell the whole truth, and I recommended that he get new counsel, and I would find somebody to go with him, and that he could not trust counsel for Merrill Lynch because there was a conflict of interest. And he said he was afraid to do that and said he would not do that, and he would not do it, and he sobbed some more and talked about how terrible they were, and he didn't do it.

SNOW: And he also indicated that you had told him that there was a deal with -- that Merrill Lynch was trying to work out a deal with the government. Did Merrill Lynch ever tell you they were trying to work out a deal with the government? And did Doug Faneuil specifically said that deal would include looking the other way when it came to Martha Stewart?

GUTMAN: That isn't quite what happened. I told Faneuil, as I testified, that Marcus, the lawyer for Merrill Lynch had told me that he was attempting to work out a deal by which everyone associated with Merrill Lynch would be off the hook and the chips would fall where they may.

SNOW: Jeremiah Gutman, thank you very much for joining us this morning. And, Daryn, the defense continuing its case. Peter Bacanovic's attorneys bringing an ink expert to the stand -- Daryn.

KAGAN: All right, and we'll find out more about that as the day goes on. Mary Snow, in Manhattan, thank you.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com