Defense witness bolsters Stewart’s story

Judge delays ruling on securities fraud

? Weeks before Martha Stewart sold her ImClone Systems stock, her stockbroker mentioned his desire to get rid of her shares before they fell to $60, a Stewart business manager testified Monday.

The testimony by Heidi DeLuca undercuts the government’s charge that Stewart and the broker dreamed up the $60 price floor later, as a cover story.

DeLuca, testifying for the defense, said stockbroker Peter Bacanovic told her on Nov. 8, 2001, that he could “set a floor price of $60 or $61” for Stewart’s ImClone shares.

“He said he would speak to Martha about it personally,” DeLuca said. The conversation would have been long before Stewart dumped her shares on Dec. 27, 2001.

Also Monday, U.S. District Judge Miriam Goldman Cedarbaum put off a ruling on whether to throw out any charges in the case.

The judge has appeared intrigued by the possibility of throwing out the most serious charge against Stewart — securities fraud — which accuses her of deceiving investors in her media conglomerate, Martha Stewart Living Omnimedia, when she publicly proclaimed her innocence.

The judge has called that charge “novel” and “the most problematic” of the five counts each against Stewart and Bacanovic.

The government contends that Stewart sold her ImClone stock after Bacanovic tipped her that ImClone founder Sam Waksal was frantically trying to unload his holdings. Waksal had advance word that the government rejected an application for an ImClone drug — a decision that would later send ImClone stock plummeting.

Also in the courtroom Monday, Stewart got support from Bill Cosby, who sat directly behind her in the courtroom. Asked by reporters why he showed up, Cosby said: “I’m here for a friend.”