NEW YORK — Martha Stewart’s fiery lawyer Robert Morvillo ridiculed the case against his client as flimsy, circumstantial and fueled by politically motivated prosecutors in the much-anticipated opening arguments at the harried homemaker’s federal trial in Gotham.
Assistant U.S. Attorney Karen Patton Seymour insisted that Stewart’s broker “Peter Bacanovic gave Stewart a tip that led her to dump all of her stock — a secret that no other investor knew” and that together “they decided to lie and come up with an elaborate cover-up.”
Bacanovic’s attorney Richard Strassberg said the former Merrill Lynch star “did not lie. He did not alter documents. He has been falsely accused.”
Stewart, a national brand whose company has taken a drubbing, and Bacanovic, a financial adviser and friend to the rich and famous, are being tried together.
Case centers on Stewart’s sale of 3,928 shares in biotech company ImClone on Dec. 27, 2001. She sold the stock after Bacanovic’s assistant, Douglas Faneuil, told her that ImClone CEO Sam Waksal, another Bacanovic client, was dumping his.
Waksal, now in prison for insider trading, sold because he knew ImClone’s stock was about to be decimated by an adverse Food and Drug Administration ruling on the company’s key experimental drug Erbitux. Lawyers for Stewart and Bacanovic said neither of them spoke to Waksal or knew at the time why Waksal was selling his ImClone stock.
In an indication of the line of defense, Morvillo said Bacanovic had urged Stewart for three months to sell the ImClone stake. He said Stewart and Bacanovic had agreed to sell if the stock fell to $60 (an explanation prosecutors claim is a fabrication).
The judge has said she expects the trial to last about six weeks.
Shares of Martha Stewart Living Omnimedia fell 3.09% on Tuesday to $12.84.