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Last Updated: Wednesday, 19 November, 2003, 06:51 GMT
Judge OKs Martha Stewart charges
Martha Stewart
Martha Stewart has denied all charges
US domestic guru Martha Stewart has failed in her attempt to get charges linked to insider dealing dropped ahead of her trial in January.

Her lawyers wanted to strike out the two most serious charges, obstruction of justice and securities fraud.

They claimed that she was using her right to free speech when she denied insider dealing, rather than trying to prop up shares in her company.

But the judge said that right did not apply to "false factual statements".

The scandal surrounding Martha Stewart - an icon of US media and retail, and the face of a homecare empire - began when a friend's biotechnology company warned investors in 2001 that regulators had rejected a drug application.

Shares in the firm, ImClone, plummeted.

But soon afterwards it emerged that Ms Stewart had sold shares worth about $230,000 the day before the announcement, sparking allegations that she might have been told about the announcement ahead of time.

Trading on private information leaked selectively by a public company is insider dealing, an offence for which ImClone's founder, Sam Waksal, is currently serving a seven-year jail term.

Charges

The securities fraud and obstruction of justice charges relate to Ms Stewart's protestations of innocence following the publication of the allegations.

Her pleas, the defence argued, were simply a matter of self-protection.

But prosecutors say they were designed to shore up shares in her firm, Martha Stewart Living Omnipedia.

Using securities fraud charges - which carry a maximum sentence of 10 years - to tackle that kind of comment was "novel", District Judge Miriam Cedarbaum conceded.

But she said the judgement should rest with a jury, not with her.


SEE ALSO:
Hope dawns for Martha Stewart
30 Oct 03  |  Business
Scandal hits Martha Stewart profits
11 Aug 03  |  Business
Martha court date set
19 Jun 03  |  Business
'Confident' Martha fights back
05 Jun 03  |  Business
Stewart resigns as company head
05 Jun 03  |  Business


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