Day One of Courtroom Saga: Martha Stewart Pleads Innocent

21 January 2004

A US District Court in Manhattan is not the elegant and discreetly tasteful setting America's style queen would herself have chosen for the most important public appearance of her multimillion-dollar media career.

The Manhattan district attorney accuses Martha Stewart and her stockbroker Peter Bacanovic of lying to obstruct an investigation into possible stock insider trading two years ago.

The trading in question is Stewart's disposal of nearly 4,000 shares in biotech firm ImClone one day before its stock slumped on news the US Food and Drug Administration had rejected one of its cancer drugs.

Prosecutors allege Stewart was tipped off by a personal friend, ImClone boss Sam Waksal, already in prison for trading shares before the FDA's decision became public. Stewart and her broker insist they're innocent.

An accomplished public performer, Stewart's plea of innocence was barely audible. She reiterated her "not guilty" plea on all five counts of the indictment, as did Bacanovic. "Very well," responded US District Court Judge Miriam Goldman Cedarbaum. "I will enter your pleas. You may be seated."

Jury selection then began -- a process Stewart's lawyers are expected to stretch to near infinity. Legal experts predict the trial could be won or lost even before prosecutors submit their opening arguments.

"Jury selection is everything," says Chris St Hilaire of Jury Insight. "A lot of people spend a lot of time figuring out which message you want to put forward in a trial, but it doesn't matter if the audience isn't willing to listen and be persuaded by it."

Judge Cedarbaum has already ruled that reporters would not be allowed in the courtroom during jury selection -- a significant decision, lawyers believe, as it implies she will allow prosecuting and defense attorneys to grill individual jury candidates about specific beliefs and feelings toward Stewart.

Stewart's defense team is expected to major on her personal integrity -- on which perceived quality she has built a media empire. In her own magazine, Martha Stewart Living, the arbiter of chic wrote about honesty, lamenting the fact that so many politicians and sports stars had revealed themselves to be "masters of deception".

"As a child, I was encouraged to tell the truth, and I did," Stewart wrote. Warming to her theme, she continued: "Dishonesty is a thief of time, of energy, of pride. We must remember -- and teach our children (and perhaps our political figures) -- one essential: The truth shall make you free."

Data sourced from: USA Today; additional content by WARC staff