From coverage of the opening arguments:

[Martha Stewart’s lawyer, Robert] Morvillo said Ms. Stewart had sold 51,000 shares of ImClone in the fall, leaving her with fewer than 4,000, which Mr. Bacanovic had been urging her to get rid of for about a month. He said the two had agreed about a week before, when Mr. Faneuil was away on vacation, that Ms. Stewart would consider selling the stock if it fell to $60 a share. On December 27, the stock fell below $60 for the first time since their discussion.

The defense argued that given the falling stock price and the agreement to talk about selling when the stock hit $60, it was only responsible for Mr. Bacanovic to reach out to Ms. Stewart. “How did she know Sam Waksal had decided to do the dumbest, worst, most offensive thing in the world on December 27?” Mr. Morvillo said. [NY Sun]

The whole opening argument is here.

So let’s get this straight. Martha Stewart, who is worth a billion dollars, had sold 92% of her shares in ImClone months before. Now if she had lost the entire value of the remaining 4,000 shares she would have lost about a quarter of a million dollars. But instead, she supposedly sells on inside information and allegedly lies to the Feds to cover it up. This costs her a $400 million loss in the value of her company.

Furthermore, we have to believe that the broker who tipped her off was not smart enough to do it in such a way that Martha Stewart would have an airtight case against any accusationa of insider trading. And we have to believe that he’s not just saying what prosecutors want to hear, to save his own skin by giving them a “big fish.”

Why on Earth should anyone believe him instead of Martha Stewart?

Now we learn this:

A federal judge put Martha Stewart’s trial on hold yesterday after learning that prosecutors withheld a key document from the defense until the last minute.

The document was an FBI report of a January 15, 2003, interview with the lawyer who originally represented the star prosecution witness, Douglas Faneuil,who was the assistant to Ms.Stewart’s co-defendant, Peter Bacanovic….

The multipage document says Mr. Faneuil’s former lawyer, Jeremiah Gutman, told investigators his client said he could not remember if it was Mr. Bacanovic or Samuel Waksal, the chief executive officer of ImClone Systems, who told him to inform Ms. Stewart that Waksal was trying to sell his Im-Clone shares the day before his company announced bad news. [NY Sun]

The following day prosecutors provided 10 more never-before-seen documents to the defense. The government deserves to lose this case, in as humiliating a way as possible. The good thing is, looks like it’s happening. For more, see: and

Voice of Capitalism

Capitalism news delivered every Monday to your email inbox.

You have Successfully Subscribed!

Pin It on Pinterest