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Martha Stewart Indicted

Aired June 04, 2003 - 15:00   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.


JUDY WOODRUFF, CNN ANCHOR: Martha Stewart, the woman who turned her talent for tasteful home decor into a multi-million dollar corporate empire has been indicted on criminal charges. She is scheduled to be arraigned this hour in federal court in Manhattan.
Earlier, a grand jury indicted Stewart on multiple counts related to an insider stock trading scandal. Her stock broker, Peter Bacanovic, was indicted on similar charges. The counts include conspiracy to obstruct justice, make false statements and commit perjury, two additional counts of making false statements, plus obstruction of justice and securities fraud. A short time ago the U.S. attorney said the variety of charges boil down to a simple concept.

(BEGIN VIDEO CLIP)

JAMES COMEY, U.S. ATTORNEY: This criminal case is about lying. Lying to the FBI, lying to the SEC and lying to investors. That is conduct that will not be tolerated by anyone. Martha Stewart is being prosecuted not because of who she is, but because of what she did.

(END VIDEO CLIP)

WOODRUFF: With me now for more on the Martha Stewart indictment is CNN's legal analyst Jeffrey Toobin. Jeffrey, how good a case do you think they have against her?

JEFFREY TOOBIN, CNN LEGAL ANALYST: Well it's a somewhat different case than we expected. There is no charge of insider trading. And there is, as expected, obstruction of justice and conspiracy to obstruct justice.

There's also an additional count. Something that I've never seen before in a White collar case, which is a securities fraud count which said Martha Stewart defrauded her own shareholders by going public and declaring her innocence saying, trust me, I didn't do anything wrong. Keeping her stock afloat, the prosecutors charge, even though she knew she did do something wrong.

That is a very unusual charge. We'll see whether they all stand up in court. And at this moment she is wiping the black ink off her fingertips from being fingerprinted and going to court and facing the judge for the first time.

WOODRUFF: Jeffrey, just about -- well, a lot of people expected insider trading to be a part of this, though, didn't they? TOOBIN: They did. And again a peculiarity here. The Securities and Exchange Commission also filed a case, a non-criminal case against her today. And they charged her with insider trading.

The U.S. attorney said, well, we didn't think we could prove insider trading criminally, but the SEC thought they could prove it civilly. Unusual, not unprecedented. But, again, it shows what a difficult case this was to put together and why it took so long.

WOODRUFF: So you have two different offices going against her simultaneously. Who will get the first crack at this?

TOOBIN: The way it always work is criminal first. U.S. attorney will go first, criminal trail will go first. And almost inevitably the civil trial will sort of usually be settled in line with how the criminal case works out. All the chips are on the table for the criminal case, and the SEC will follow behind.

WOODRUFF: All right. Jeffrey Toobin, our legal analyst. Good to see you, Jeffrey. Take care.

TOOBIN: OK.

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 - 15:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JUDY WOODRUFF, CNN ANCHOR: Martha Stewart, the woman who turned her talent for tasteful home decor into a multi-million dollar corporate empire has been indicted on criminal charges. She is scheduled to be arraigned this hour in federal court in Manhattan.
Earlier, a grand jury indicted Stewart on multiple counts related to an insider stock trading scandal. Her stock broker, Peter Bacanovic, was indicted on similar charges. The counts include conspiracy to obstruct justice, make false statements and commit perjury, two additional counts of making false statements, plus obstruction of justice and securities fraud. A short time ago the U.S. attorney said the variety of charges boil down to a simple concept.

(BEGIN VIDEO CLIP)

JAMES COMEY, U.S. ATTORNEY: This criminal case is about lying. Lying to the FBI, lying to the SEC and lying to investors. That is conduct that will not be tolerated by anyone. Martha Stewart is being prosecuted not because of who she is, but because of what she did.

(END VIDEO CLIP)

WOODRUFF: With me now for more on the Martha Stewart indictment is CNN's legal analyst Jeffrey Toobin. Jeffrey, how good a case do you think they have against her?

JEFFREY TOOBIN, CNN LEGAL ANALYST: Well it's a somewhat different case than we expected. There is no charge of insider trading. And there is, as expected, obstruction of justice and conspiracy to obstruct justice.

There's also an additional count. Something that I've never seen before in a White collar case, which is a securities fraud count which said Martha Stewart defrauded her own shareholders by going public and declaring her innocence saying, trust me, I didn't do anything wrong. Keeping her stock afloat, the prosecutors charge, even though she knew she did do something wrong.

That is a very unusual charge. We'll see whether they all stand up in court. And at this moment she is wiping the black ink off her fingertips from being fingerprinted and going to court and facing the judge for the first time.

WOODRUFF: Jeffrey, just about -- well, a lot of people expected insider trading to be a part of this, though, didn't they? TOOBIN: They did. And again a peculiarity here. The Securities and Exchange Commission also filed a case, a non-criminal case against her today. And they charged her with insider trading.

The U.S. attorney said, well, we didn't think we could prove insider trading criminally, but the SEC thought they could prove it civilly. Unusual, not unprecedented. But, again, it shows what a difficult case this was to put together and why it took so long.

WOODRUFF: So you have two different offices going against her simultaneously. Who will get the first crack at this?

TOOBIN: The way it always work is criminal first. U.S. attorney will go first, criminal trail will go first. And almost inevitably the civil trial will sort of usually be settled in line with how the criminal case works out. All the chips are on the table for the criminal case, and the SEC will follow behind.

WOODRUFF: All right. Jeffrey Toobin, our legal analyst. Good to see you, Jeffrey. Take care.

TOOBIN: OK.

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