Martha Stewart’s lawyers upset about pre-indictment leaks
By Erin McClam Associated Press Writer
NEW YORK (AP) – Martha Stewart’s lawyers asked a federal judge Monday to order an investigation into who leaked details of her indictment to the news media before the grand jury returned the formal charges.
U.S. District Judge Miriam Goldman Cedarbaum appeared skeptical of the request but said she would consider it.
News reports before the June 4 indictment, quoting anonymous sources, accurately predicted the home-decorating maven would be charged with obstruction of justice and conspiracy, and not with the harder-to-prove offense of insider trading.
Stewart’s lawyers said the leaks may have influenced the grand jury’s eventual decision and violated federal rules that prohibit making grand jury proceedings public.
“Lots of people touched this case within the government” before the indictment was returned, lawyer Robert Morvillo said. He listed the FBI, the Securities and Exchange Commission and the Justice Department.
“There must have been some information disseminated by somebody who was privy to the grand jury thinking to the media,” Morvillo said.
Prosecutor Michael Schachter said much of the information in the news reports appeared to have come from the defense attorneys, not prosecutors.
He said prosecutors had told the defense what the charges would be on June 1, three days before the indictment was issued. And he noted Stewart’s company had issued a press release June 3, saying it expected an indictment soon.
Schachter urged the judge not to order an investigation of leaks, saying it would be “expensive and burdensome” for law-enforcement resources that are already stretched thin.
Stewart, 61, is accused of lying about why she sold nearly 4,000 shares of ImClone Systems stock. She sold it just before a Food and Drug Administration decision about an ImClone cancer drug sent the stock plummeting. She has denied any wrongdoing.
Prosecutors say her stockbroker tipped off Stewart that the family of ImClone founder Sam Waksal was trying to sell its shares.
She and broker Peter Bacanovic are set to go on trial Jan. 12.