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Martha's lawyers hint at defense
Stewart's attorneys post statement on Web site that may preview defense strategy.
June 10, 2003: 1:11 PM EDT

NEW YORK (CNN/Money) - Martha Stewart's attorneys have presented a series of arguments on behalf of their client on her Web site, statements that may give a partial preview of her defense of federal charges filed against her last week.

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CNNfn's Mary Snow takes a look at the arguments presented by Martha Stewart's lawyers on her Web site.

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On the Web site, the two attorneys, Robert Morvillo and John Tigue, say they are correcting "frequent errors" in media reports about Stewart in the wake of her indictment. The posting from the lawyers is dated Tuesday.

The indictment alleges obstruction of justice by Stewart in the probe of her sale of nearly 4,000 shares of ImClone Systems (IMCLE: Research, Estimates) stock in December of 2001, just before news was released that the Food and Drug Administration had rejected an application involving the biotech company's proposed cancer-fighting drug Erbitux. ImClone's CEO Sam Waksal, a friend of Stewart, has pled guilty to insider trading charges himself, and is due to be sentenced in his case Tuesday.

Stewart appeared in court last Wednesday. She was fingerprinted and photographed by law enforcement officers Monday. The photographs of the well-known domestic style trendsetter will not be released to the public.

Stewart's lawyers argue that their client's indictment does not allege she was provided inside information by Waksal about ImClone's application for its cancer drug Erbitux -- or about anything else. It also argues that the indictment does not allege that Martha Stewart knew the reason why Waksal placed an order to sell ImClone shares, only that he was trying to sell. It also points out that Stewart is not facing criminal charges of insider trading.

"Even though insider trading was the subject of the criminal investigation that she supposedly obstructed, the insider trading charge is included only in the civil complaint," said the lawyer's statement.

The attorneys also point out that she is not charged with perjury in the case.

"Martha did not produce an inaccurate telephone log to government investigators," said the lawyer's statement. "The government acknowledges that she 'temporarily' made changes to the log and then 'directed her assistant to return the message to its original wording.'"

Finally the lawyers point out that Stewart and members of the Waksal family were not the only ones to sell ImClone shares in advance of the official announcement about FDA action on Erbitux.

"On that day, (Dec. 27, 2001) more than 7.7 million shares were traded and the price fell from $63.49 at the opening of trading to $58.30 at the close of trading," said the lawyers.

Stewart started the Web site last week the day after the indictment, using it to proclaim her innocence and thank her supporters.  Top of page

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