Stewart's attorney - Would-be jurors confused

NEW YORK -- Too many prospective jurors in the Martha Stewart case wrongly think she is charged with insider trading, her lawyer complained to the judge, according to transcripts released Thursday.

In the transcripts from the closed-door jury selection process, Robert Morvillo said Wednesday that U.S. District Judge Miriam Goldman Cedarbaum shared blame for the misunderstanding because of her own choice of words. The judge replied that she would make sure the jury is properly informed.

Stewart is charged with obstruction of justice and securities fraud -- but not insider trading -- over stock she sold in 2001.

In the transcripts, which cover the first two days of juror questioning, the judge appears to have given up on finding 12 people completely unfamiliar with the gracious-living guru, zeroing in on those who say they can be fair despite heavy pretrial publicity.

During the first day of questioning, Cedarbaum asking potential jurors whether they can decide the case solely on the evidence.

Cedarbaum has fretted publicly about the volume of news coverage, and many potential jurors appear to be vaguely familiar with the case, if only its celebrity defendant.

"I mean, it's been impossible to totally not hear about the case," one potential juror told the judge, according to the transcript. "It has been everywhere."

The judge followed up: "And you have no problem following exactly the judge's statement of the law?" The juror answered, "Right."

The judge told the potential juror, a housewife and former lawyer, that she may wind up on the jury, depending in part on whether she can find someone to watch her 13-year-old child.

The trial continued to attract attention outside the courthouse as well. As Stewart arrived Thursday morning, she smiled, waved and gave a thumbs-up to supporters who held placards that spelled out "SAVE MARTHA" in pastel letters.

"We brought a smile to Martha's face," one said.

Stewart, 62, is accused of lying to the government and her own shareholders about why she sold ImClone Systems stock in late 2001, just before it plummeted on a negative government review of an ImClone cancer drug.

Hundreds of people have filled out jury questionnaires, and the judge is asking many of them follow-up questions this week, in front of Stewart and co-defendant Peter Bacanovic, in private sessions.

In the transcripts, Morvillo told the judge Wednesday, "I am asking the court to correct the misimpression that many jurors have, which is in part fostered by your honor saying that this is a securities fraud case."

"I will see to it that the jury does not believe that there is a charge of insider trading," the judge answered.

The judge is said to want about 50 jurors for the next phase, when lawyers can voluntarily strike them one by one if they believe they might lean toward the opposing side.

After questioning Tuesday and Wednesday, about two dozen have been cleared to advance. The questioning continued Thursday.

One potential juror answered in the questionnaire that he did not trust Stewart. In a follow-up interview, he told the judge: "Sometimes people that are -- that are powerful are not so trustworthy." He was disqualified.

A woman reported that she worked on a trading desk at a securities firm where the Stewart case is talked about "very regularly" and said she would have trouble ignoring news reports about the trial.

The media are relying on transcripts of juror questioning, provided a day late by the court and with names removed, because the judge has barred reporters from watching the process that is usually held in open court.

Stewart says she and Bacanovic, her former stockbroker, had a standing order to sell Stewart's 3,928 shares of ImClone stock when its price fell below $60 per share.

But the government says Stewart sold after she was tipped that her friend Sam Waksal, the founder of ImClone, was trying to sell his shares. Waksal later admitted having advance word of the government decision on the drug.