XPost: dc.politics, atl.general, uw.clubs.vietnamese   
   XPost: alt.politics.bush   
   From: multiple.felonies@hillaryclinton.com   
      
   A federal jury found Martha Stewart guilty of all four counts   
   related to her obstruction of a government investigation into   
   her sale of ImClone Systems Inc. stock in late 2001, giving the   
   government a big win in its pursuit of white-collar crime.   
      
   The jury of eight women and four men took less than three days   
   to find that Ms. Stewart, 62 years old, guilty of obstructing   
   the investigation and making false statements.   
      
   Ms. Stewart faces about one to two years in prison, under   
   federal sentencing guidelines, but the judge could order that   
   she spend some of that time in a halfway house or in home   
   detention.   
      
   Ms. Stewart's former Merrill Lynch & Co. broker, Peter   
   Bacanovic, who was her co-defendant, was found guilty of four of   
   the five counts against him. He was found guilty of conspiracy,   
   making false statements, perjury and obstruction of agency   
   proceedings. He was found not guilty of the charge of making   
   false documents.   
      
   Ms. Stewart said she would appeal.   
      
   "I am obviously distressed by the jury's verdict but I continue   
   to take comfort in knowing that I have the confidence and   
   enduring support of my family and friends," Ms. Stewart said in   
   a statement on her Web site. An earlier version of the   
   statement, which was posted shortly after the verdict was   
   announced, and then revised later in the afternoon, began: "I am   
   obviously distressed by the jury's verdict but I continue to   
   take comfort in knowing that I have done nothing wrong."   
      
   Ms. Stewart's statement continued: "I will appeal the verdict   
   and continue to fight to clear my name. I believe in the   
   fairness of the judicial system and remain confident that I will   
   ultimately prevail.   
      
   "I can't tell you how much I appreciate all the words of   
   encouragement I have received from thousands of supporters. It   
   is your continued support that will keep me going until I am   
   completely exonerated."   
      
   Each one of the counts against Ms. Stewart carries a maximum   
   prison sentence of five years.   
      
   "Maybe it's a victory for the little guys who lose money in the   
   market because of these kinds of transactions," said juror   
   Chappell Hartridge.   
      
   Ms. Stewart grimaced upon hearing the verdict, and her eyes   
   widened slightly. Her daughter, Alexis Stewart, was in tears.   
   Ms. Stewart left the courtroom with a somber expression. She and   
   Mr. Bacanovic were ushered by their lawyers and bodyguards into   
   a side room. She didn't speak to anyone at the defense table   
   before going to the holding room away from the media. She and   
   Mr. Bacanovic must report to a probation office within a week   
   for processing.   
      
   Leaving the courtroom, Mr. Bacanovic's mother said, "he lost his   
   career and his job and he had no motive."   
      
   The conviction is a big win for the government, which had been   
   accused by defense lawyers of overreaching in its attempt to   
   prosecute a celebrity. Ms. Stewart's attorneys have long   
   complained that Ms. Stewart was charged because of who she is,   
   not what she did. They pointed out that Ms. Stewart wasn't   
   charged criminally with an underlying crime, such as criminal   
   insider trading. Instead, she was charged with lying about the   
   reasons for her sale.   
      
   Prosecutors also brought a novel charge of securities fraud   
   against Ms. Stewart, accusing her of trying to prop up the stock   
   of her own company, Martha Stewart Living Omnimedia Inc., by   
   making false public statements about the reason for her ImClone   
   sale. The judge threw out that charge, the most serious one Ms.   
   Stewart faced, before the jury started deliberating.   
      
   The future of Martha Stewart Living, the domestic products and   
   publishing company Ms. Stewart founded and controls, is   
   uncertain.   
      
   In the hour the stock continued to trade after the verdict was   
   rumored, shares were up $2.31, or 16%, to $16.34 on the New York   
   Stock Exchange. The climb began in the space of just a few   
   minutes, starting at 2 p.m., when TV reports first ran. The   
   stock had been languishing around $14 most of the day after   
   closing Thursday at $14.03.   
      
   Trading was halted at 3 p.m. just before the verdict was   
   announced. Almost immediately, indications were that the stock   
   would plummet when it resumed trading. When it did shortly after   
   3:30 p.m., it fell almost $6, putting it down $3.17, or 23%, to   
   $10.86.   
      
   Trading volume for the day was 16.7 million shares, more than 30   
   times greater than the average daily volume of about 474,000   
   shares over the past three months.   
      
   Advertisers are already skittish, hurting Ms. Stewart's   
   publications, and the company's flagship, Martha Stewart Living   
   magazine, recently slashed its guaranteed circulation to 1.8   
   million from 2.3 million because of declining consumer interest.   
      
   Still pending are civil charges of insider trading filed by the   
   Securities and Exchange Commission. The SEC could seek to bar   
   Ms. Stewart from holding office or being a director of a public   
   company.   
      
   Ms. Stewart's conviction will likely set off a wave of second-   
   guessing about her legal strategy. Led by renowned defense   
   attorney Robert Morvillo, Ms. Stewart's team put on a minimal   
   defense, calling only one brief witness. Ms. Stewart didn't   
   testify. In his summation, Mr. Morvillo concentrated heavily on   
   pointing out the lack of evidence and asserted that the   
   government hadn't proved its case.   
      
   The defendants were charged with conspiring to obstruct an SEC   
   investigation into trading of ImClone Systems stock. Ms. Stewart   
   says she sold her 3,928 ImClone shares on Dec. 27, 2001, because   
   she had a pre-existing agreement with Mr. Bacanovic to sell when   
   the stock fell below $60 a share. The government argued that   
   agreement was fabricated afterward to conceal that Ms. Stewart   
   had been tipped by Mr. Bacanovic's assistant about attempted   
   selling by the then-chief executive of ImClone, Samuel Waksal.   
   Dr. Waksal pleaded guilty last year to insider trading and other   
   charges and is serving a seven-year prison sentence.   
      
   Ms. Stewart's conviction follows a setback for the government in   
   the case of former star technology banker Frank Quattrone, who   
   was also charged with obstruction of justice but not an   
   underlying crime. In October, a federal judge granted a mistrial   
   in the case after the jury was unable to reach a verdict. The   
   former Credit Suisse First Boston investment banker is scheduled   
   to be retried next month.   
      
   Several senior executives implicated in the big wave of   
   corporate scandals are also on trial, including members of the   
   family that founded Adelphia Communications Corp. and L. Dennis   
   Kozlowski and Mark Swartz of Tyco International Ltd.   
      
   This week, a federal grand jury indicted Bernard J. Ebbers,   
   WorldCom's former chief executive, on securities fraud for his   
   role in the telecom company's $11 billion accounting fraud. And   
   last month, prosecutors filed a wide-ranging indictment against   
   Jeffrey Skilling, the former chief executive of Enron Corp.   
      
      
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