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American Morning
Opening Statements to Begin in Martha Stewart Trial
Aired January 27, 2004 - 08:19 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.
SOLEDAD O'BRIEN, CNN ANCHOR: Opening statements are set to be delivered today in the Martha Stewart trial. Stewart is accused of lying to the government about selling her ImClone stock just before bad news hit the market about the company.
Deborah Feyerick is covering the trial from New York federal court.
(BEGIN VIDEOTAPE)
DEBORAH FEYERICK, CNN CORRESPONDENT (voice-over): The first witness for prosecutors, the acting CEO of ImClone, Daniel Lynch. He stepped up to lead the troubled company a year after Sam Waksal stepped down. Waksal, a good friend of Stewart's, dumped ImClone stock a day before the FDA rejected ImClone's cancer drug. He's serving seven years for insider trading.
Also up for the prosecution, Merrill Lynch's compliance officer, expected to explain how all brokers are told the rules of trading. Merrill Lynch broker Peter Bacanovic is on trial with Stewart,. Prosecutors say Bacanovic instructed Stewart to sell ImClone t same day Waksal was selling his shares.
Bacanovic was on vacation at the time, but he left instructions with his assistant, Douglas Fanueil, who contacted Stewart. Fanueil, a star prosecution witness, is expected to contradict Stewart's claim that she and her broker had a standing agreement to sell ImClone if it fell below $60.
Prosecutors also plan to call financial analysts who cover the media. One of them from Morgan Stanley could talk about the effect Stewart's ImClone problems were having on her own stock prices.
SETH TAUBE, SECURITIES LAWYER: The government needs to show that the reason she was coming up with the story that she had a standing order to sell at $60 was not to show that she wasn't trading on inside information, but to keep the stock price of Martha Stewart Omnimedia high.
(END VIDEOTAPE)
FEYERICK: Now, on the jury, eight women, four men. One of them is a minister who counsels married couples. Another is a pharmacist originally from Uganda. Several of the jurors had heard of Martha Stewart's legal problems before they were picked for the jury, but all of them told the judge that they can be fair. Now, Stewart's defense was hit with a blow yesterday by the judge, the judge telling them that they cannot tell the jury that Stewart was not charged with insider trading, nor can they characterize the securities fraud charge by saying she was only trying to say she was innocent -- Soledad.
O'BRIEN: Deborah Feyerick for us this morning in Manhattan.
Deborah, thanks.
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 January 27, 2004 - 08:19 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
SOLEDAD O'BRIEN, CNN ANCHOR: Opening statements are set to be delivered today in the Martha Stewart trial. Stewart is accused of lying to the government about selling her ImClone stock just before bad news hit the market about the company.
Deborah Feyerick is covering the trial from New York federal court.
(BEGIN VIDEOTAPE)
DEBORAH FEYERICK, CNN CORRESPONDENT (voice-over): The first witness for prosecutors, the acting CEO of ImClone, Daniel Lynch. He stepped up to lead the troubled company a year after Sam Waksal stepped down. Waksal, a good friend of Stewart's, dumped ImClone stock a day before the FDA rejected ImClone's cancer drug. He's serving seven years for insider trading.
Also up for the prosecution, Merrill Lynch's compliance officer, expected to explain how all brokers are told the rules of trading. Merrill Lynch broker Peter Bacanovic is on trial with Stewart,. Prosecutors say Bacanovic instructed Stewart to sell ImClone t same day Waksal was selling his shares.
Bacanovic was on vacation at the time, but he left instructions with his assistant, Douglas Fanueil, who contacted Stewart. Fanueil, a star prosecution witness, is expected to contradict Stewart's claim that she and her broker had a standing agreement to sell ImClone if it fell below $60.
Prosecutors also plan to call financial analysts who cover the media. One of them from Morgan Stanley could talk about the effect Stewart's ImClone problems were having on her own stock prices.
SETH TAUBE, SECURITIES LAWYER: The government needs to show that the reason she was coming up with the story that she had a standing order to sell at $60 was not to show that she wasn't trading on inside information, but to keep the stock price of Martha Stewart Omnimedia high.
(END VIDEOTAPE)
FEYERICK: Now, on the jury, eight women, four men. One of them is a minister who counsels married couples. Another is a pharmacist originally from Uganda. Several of the jurors had heard of Martha Stewart's legal problems before they were picked for the jury, but all of them told the judge that they can be fair. Now, Stewart's defense was hit with a blow yesterday by the judge, the judge telling them that they cannot tell the jury that Stewart was not charged with insider trading, nor can they characterize the securities fraud charge by saying she was only trying to say she was innocent -- Soledad.
O'BRIEN: Deborah Feyerick for us this morning in Manhattan.
Deborah, thanks.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
