Word: stewart
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...heart of the case was a stock tip that, the government alleged, allowed Stewart, once worth $1 billion, to net a measly $45,000. Prosecutors never filed criminal insider-trading charges, though, and Stewart handed her tormentors a comparatively easy obstruction case when, as the jury decided last week, she lied to cover up why she had sold 3,928 shares of ImClone Systems on the eve of an adverse ruling for its cancer drug Erbitux. Stewart could probably have come clean immediately and received a slap on the wrist from the Securities and Exchange Commission (sec). But by sticking...
...Stewart suffered her first visible emotional breakdown last Wednesday evening, after the case was handed to jurors, says a source close to her. She might have had an inkling of what was to come on Friday inside a crammed but quiet courtroom in lower Manhattan. The most serious charge against her, securities fraud, had been thrown out the previous week. But four counts remained--obstruction, conspiracy and two charges of making false statements. Stewart, grim-faced and dressed in her ritual uniform, a dark pantsuit, sat and showed no emotion as Judge Miriam Goldman Cedarbaum repeated the word guilty four...
Where did Stewart go wrong? Trial lawyers say her attorney, Morvillo, took too big a risk in assuming that the government had not made its case. The defense presented a truncated case and never put Stewart or Bacanovic on the stand to offer a competing version of events. Howard Schiffman, head of securities litigation at Dickstein, Shapiro, Morin & Oshinsky in Washington, notes that the defense's main argument--that Stewart and Bacanovic had an oral agreement to sell ImClone at a preset price--was left unsubstantiated. "What was the evidence that there was a prior conversation if they didn...
...Stewart got a hot tip. her first mistake, clearly, was to sell the ImClone stock, given the impetus for doing so. The bio-tech firm that was then run by her friend Sam Waksal had been riding high on its promising cancer drug. But on Dec. 26, 2001, Waksal got wind that the FDA was going to reject his company's application to move forward with its drug. The Waksal family sent word to Bacanovic, their broker as well as Stewart's, and tried to sell $7.3 million of ImClone stock. Waksal has since pleaded guilty to securities fraud...
Bacanovic was on vacation in Florida on Dec. 27, but Douglas Faneuil, his assistant, relayed the message from Waksal to him, prompting Bacanovic, according to Faneuil, to exclaim, "Oh, my God, get Martha on the phone!" The amount of money at stake was trivial to someone as wealthy as Stewart, who had previously sold 20% of her ImClone holdings. Yet Martha is famously tightfisted and, as testimony showed, an extremely demanding client. She was traveling to a resort in Mexico with her friend Mariana Pasternak. But through a series of phone calls she learned what Waksal...