Judge In Martha Stewart Case Rules--No Leak To Pre
New York, NY, Sept. 9--The U.S. attorney in New York doesn't have to investigate whether the government improperly leaked details of Martha Stewart's indictment before it was publicly announced in June, a federal judge ruled Monday.
Stewart, the founder and former chief executive of Martha Stewart Living Omnimedia Inc. was charged in June by U.S. Attorney James Comey in connection with her sale in December 2001 of ImClone Systems, Inc. shares in December 2001. The sale occurred just before ImClone said the U.S. Food and Drug Administration blocked the approval of Erbitux, its experimental cancer treatment, which caused its stock price to plummet.
But she wasn't indicted on insider trading charges and was instead fingered for allegedly interfering with the inquiry that sought to determine if she sold the stock based on non-public information--a fact revealed by the media before the grand jury released its nine-count indictment. Stewart's former broker, Peter Bacanovic, is also charged.
On Monday, U.S. District Judge Miriam Goldman Cedarbaum rejected the motion by Stewart's legal team that would have instructed Comey to look into whether the U.S. government tipped off the press.
"I have carefully examined the materials submitted by defendants in support of the application, and am not persuaded that it is likely that there was a breach of grand jury secrecy," Judge Cedarbaum wrote in her three-page decision. Furthermore, she ruled that "it is difficult to understand how defendants could have been prejudiced even if the grand jury was influenced not to charge insider trading."
