Martha Stewart Case Summary

United States vs. Martha Stewart and Peter Bacanovic occurred in 2004, and it is often regarded to be one of this century’s most sensational court cases. The trial occurred in the United States District Court for the Southern District of New York, and Judge Miriam Goldman Cedarbaum presided over the case. Robert G. Morvillo served as Ms. Stewart’s attorney, and Richard M. Strassberg served as the attorney of Mr. Bacanovic. The lead prosecution attorney was Karen Patton Seymour. Perhaps, though, it is best to begin by inspecting the facts of the case. In 2001, Martha Stewart was CEO and chairwoman of Martha Stewart Living Omnimedia, and Peter Bacanovic was Stewart’s stockbroker at Merrill Lynch. Samuel Waksal, a friend of Stewart as well as

Morvillo, Ms. Stewart’s attorney, argued that the defendants actions were not incorrect, stating, “Think that through, ladies and gentlemen. If you were on that plane, and somebody tells you somebody else is selling his stock, would you have thought you couldn’t sell the stock because they told you somebody else is selling?” Here, Morvillo appeals to the jurors’ sense of what a rational person would do in the situation of Ms. Stewart. Additionally, if Ms. Stewart had no reason to believe her actions were unjust, she would not engage in misleading investigators. Furthermore, Mr. Morvillo stated, “There will be no direct evidence introduced by the government that Martha Stewart conspired to obstruct anything. No witness will appear in this courtroom during the trial to say, ‘Martha told me to do something unlawful.”’ Here, the defendant’s attorney outlines the notion that Stewart did not knowingly attempt to engage in wrongdoing. Richard Strassberg, attorney for Bacanovic, argued, “Would Peter Bacanovic jeopardize his entire career all for a lousy $450 commission? It simply makes no sense because it didn’t happen. The government is wrong. They’ve rushed to judgement. They’ve charged an innocent man.” Like Morvillo, Strassberg takes this opportunity to emphasize the morality of Bacanovic. Lastly, and perhaps most notably, Morvillo stated that the prosecution’s case was based upon “speculation, surmise, and guesswork” in an attempt to discredit his opposition. The arguments of the defense attorneys focused upon the pre-existing agreement between Stewart and Bacanovic to sell the stock if it went below $60 per share, as well as tax loss selling. Additionally, Morvillo cited Ms. Stewart’s selling of ImClone stock prior to December 27, 2001 in efforts to demonstrate the idea that her actions were part of a pattern, rather than part of an incident of insider trading. Thus, Stewart would have no reason to lie to government