Stewart dodges securities fraud charges

New Jersey Telegraph Friday 27th February, 2004

Martha Stewart scored a legal victory Friday when a federal judge in New York dismissed the most serious charge of security fraud against her.

U.S. District Judge Miriam Goldman Cedarbaum made the ruling just before the jury was to begin deliberating next week, leaving Stewart to face four charges -- conspiracy, obstruction of justice, and two counts of lying to investigators, reports said.

Cedarbaum did not throw out any of the five charges against her former stockbroker, Peter Bacanovic.

Lawyers for Stewart and Bacanovic met with the judge Friday morning in hopes of having some of the charges related to her sale of 3,928 ImClone shares dropped, the Wall Street Journal reported.

The government claims Stewart sold her shares based on a tip ImClone CEO Sam Waksal was frantically trying to sell his own. Stewart and Bacanovic testified they had made a plan before to sell the shares if ImClone's stock price fell below $60.

The jury will hear closing arguments Monday and Tuesday, and deliberations are not expected to start until Wednesday.