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Martha Stewart's Lawyer Lashes Out at Prosecution

In a "rousing defense" Tuesday during opening arguments, Robert Morvillo, Martha Stewart's defense attorney lashed out at the Government charging they were overzealous prosecutors who made the erroneous assumption that Martha lied when she had intended to get rid of her shares all along.

Attorney Robert Morvillo offered a rousing defense of Martha Stewart Tuesday, telling a jury she had no motive to lie to investigators probing the reasons why she sold her stock in ImClone Systems Inc.

In an opening statement that sounded like a closing argument, Morvillo said his client was the victim of overzealous prosecutors who assumed Stewart lied when she said she planned to sell the shares all along. Intent on making a case against Stewart, he said, prosecutors chose to believe only that she sold the stock because she knew ImClone founder and family friend Samuel Waksal was unloading millions of his own family's shares in the company.

"This case is brought to you by the U.S. Department of Justice, headed by John Ashcroft," Morvillo said as he prowled in front of the jury box and ridiculed Congress for leaking erroneous information about Stewart and her co-defendant and former broker, Peter Bacanovic.

"Same government," Morvillo said, who at points slammed his open palm on the bar in front of the jury box for emphasis. "Leak it on one side, prosecute on the other. Same system. I think George Orwell was 20 years too early."

While other news stories are leading today with "Proseuction Says Martha Lied", we're rooting for Martha so don't expect to see those articles here, unless we decide to deride them. We'll be concentrating on the defense.

We also think this order (pdf) by the Judge in the case is very unfair. U.S. District Judge Miriam Goldman Cedarbaum ruled that Morvillo cannot argue to the jury that Martha is being prosecuted for asserting her innocence which is her protected right of free speech under the First Amendment. The Judge also ruled that Morvillo can't ask jurors to speculate as to why Stewart was not charged with insider trading.

Wednesday is a "snow day" for the Court. Trial resumes Thursday with the testimony of the cooperator- the former assistant to Martha's stockbroker--who is now singing for his supper--in exchange for being allowed to plead to a misdemeanor and avoid jail.

Faneuil originally backed the story that Stewart was engaged in tax-loss selling, and that she had an understanding with Bacanovic to consider selling her ImClone stock when it fell to $60 a share. However, by June 2002, Faneuil told the government that he had informed Stewart about the Waksal sale and began negotiating a cooperation agreement.

Faneuil admitted accepting extra compensation from Bacanovic in return for not telling the government the truth about the stock sale, and he probably avoided prison time by agreeing to testify against the defendants.

Stewart's defense is arguing that the charges are based on speculation and conjecture and there is no hard evidence to back them up. Stay tuned.

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