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American Morning

Minding Your Business: Is Martha Cooked?

Aired June 03, 2003 - 07:46   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.


BILL HEMMER, CNN ANCHOR: As the clock is ticking right now for Martha Stewart, Andy Serwer has the latest, minding our business this morning.
How are you, Drew (ph)?

DARYN KAGAN, CNN ANCHOR: How are you?

ANDY SERWER, "FORTUNE" MAGAZINE: I'm fine. Good morning to you, guys.

Well, the clock is definitely ticking. Will the alarm ever go off? I mean, that's the big question, because this thing has been ticking for months and months and months going all the way back to December of 2001.

HEMMER: That's right.

SERWER: That's when the alleged infraction took place. The investigation began about a year ago.

"The Financial Times," though, has a report in its edition today -- there she is -- that Martha Stewart, the end may be near for Martha Stewart in terms of reaching a resolution with this case with federal prosecutors. Apparently, you can see here, she has met with New York prosecutors. These are Feds, New York Feds.

Now, what "FT" is reporting is that she's gone over their heads -- doesn't that sound like Martha? -- gone over their heads to Washington to their bosses to try to cop a plea. They said, go back to New York and deal with those guys there. We're not going to do anything with you.

Now, it looks like she still may be facing criminal charges, but for obstruction, not for insider trading.

KAGAN: OK, she's the more famous player in this big mess. But what about Sam Waksal? What's happening with him? Because, ImClone, his stock, as you were talking yesterday, is doing fantastic.

SERWER: That's right. And on paper he's made a little bit of money, because he still owns some shares; so does his brother, Harlan (ph), and a bunch of other executives. But...

KAGAN: He's not going to a place where he can really spend it.

SERWER: Yes, well, chewing gum, right? That kind of thing. He may be facing the big house a week from today, because he will be sentenced in seven days apparently. So interesting.

Martha Stewart, by the way, of course, if she is found guilty of these criminal charges, she could face jail time, and it really could happen, because the Feds are not going to back off at this point because they would look really foolish in this environment. That's No. 1.

And even more critical for Martha Stewart, she would lose the right to be an officer of a public company.

HEMMER: Wow!

SERWER: And that to her would be devastating.

KAGAN: And devastating to that company, right? Because, as you've pointed out in the past, she is...

SERWER: She is that company.

KAGAN: ... her company.

SERWER: And it will be interesting what role she would play. I mean, she'd still be Uber (ph) consultant or something like this. But this could really be happening soon, which is something.

HEMMER: Eighteen months later.

SERWER: Yes.

HEMMER: Thank you, Andy.

SERWER: 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 3, 2003 - 07:46   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BILL HEMMER, CNN ANCHOR: As the clock is ticking right now for Martha Stewart, Andy Serwer has the latest, minding our business this morning.
How are you, Drew (ph)?

DARYN KAGAN, CNN ANCHOR: How are you?

ANDY SERWER, "FORTUNE" MAGAZINE: I'm fine. Good morning to you, guys.

Well, the clock is definitely ticking. Will the alarm ever go off? I mean, that's the big question, because this thing has been ticking for months and months and months going all the way back to December of 2001.

HEMMER: That's right.

SERWER: That's when the alleged infraction took place. The investigation began about a year ago.

"The Financial Times," though, has a report in its edition today -- there she is -- that Martha Stewart, the end may be near for Martha Stewart in terms of reaching a resolution with this case with federal prosecutors. Apparently, you can see here, she has met with New York prosecutors. These are Feds, New York Feds.

Now, what "FT" is reporting is that she's gone over their heads -- doesn't that sound like Martha? -- gone over their heads to Washington to their bosses to try to cop a plea. They said, go back to New York and deal with those guys there. We're not going to do anything with you.

Now, it looks like she still may be facing criminal charges, but for obstruction, not for insider trading.

KAGAN: OK, she's the more famous player in this big mess. But what about Sam Waksal? What's happening with him? Because, ImClone, his stock, as you were talking yesterday, is doing fantastic.

SERWER: That's right. And on paper he's made a little bit of money, because he still owns some shares; so does his brother, Harlan (ph), and a bunch of other executives. But...

KAGAN: He's not going to a place where he can really spend it.

SERWER: Yes, well, chewing gum, right? That kind of thing. He may be facing the big house a week from today, because he will be sentenced in seven days apparently. So interesting.

Martha Stewart, by the way, of course, if she is found guilty of these criminal charges, she could face jail time, and it really could happen, because the Feds are not going to back off at this point because they would look really foolish in this environment. That's No. 1.

And even more critical for Martha Stewart, she would lose the right to be an officer of a public company.

HEMMER: Wow!

SERWER: And that to her would be devastating.

KAGAN: And devastating to that company, right? Because, as you've pointed out in the past, she is...

SERWER: She is that company.

KAGAN: ... her company.

SERWER: And it will be interesting what role she would play. I mean, she'd still be Uber (ph) consultant or something like this. But this could really be happening soon, which is something.

HEMMER: Eighteen months later.

SERWER: Yes.

HEMMER: Thank you, Andy.

SERWER: 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.