Tuesday, December 30, 2003

Stewart judge rules on records

The Associated Press

NEW YORK - Just days before the criminal trial of Martha Stewart, a judge on Monday rejected government efforts to collect more evidence in the securities fraud case.

U.S. District Judge Miriam Goldman Cedarbaum said attorney-client privilege protects some of the documents sought by federal prosecutors in Manhattan while other material is not relevant to the charges.

She did permit the government to obtain billing records from a law firm hired by Stewart.

Prosecutors had sought 11 categories of documents from a law firm that represents Stewart and from co-defendant Peter Bacanovic.

Stewart, whose criminal trial begins in mid-January, is accused of lying to investigators about why she unloaded ImClone Systems stock just before it plunged on a negative government review of the company's cancer drug.

Stewart claims she had a standing order with Bacanovic, her stockbroker, to sell the stock when it fell to $60. Both pleaded innocent.

The judge said prosecutors failed to prove they were entitled to most of the evidence they sought.

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