Federal court jury deliberates testimony from Stewart case

NEW YORK -- Jurors in the Martha Stewart case ended their first day of deliberations Wednesday without reaching a verdict on whether the founder of a gracious-living empire lied about a well-timed stock sale.

Deliberations were to resume today.

The jury received the case after 90 minutes of complex instructions from U.S. District Judge Miriam Goldman Cedarbaum.

After about two hours of deliberation, the jury of eight women and four men requested a readback of testimony regarding former brokerage assistant Douglas Faneuil, the government's star witness. They also asked to see charts detailing phone calls of the main players in the case on the day of the stock sale.

Later in the day, jurors also asked for several pieces of evidence, including what the government claims is a doctored worksheet used to make a supposed stock sale agreement appear legitimate.

The combined charges against Stewart carry up to 20 years in prison, but she would probably get far less under federal sentencing guidelines.

However, if convicted on any charge, the 62-year-old Stewart would have to step down as chief creative officer of her media company, Martha Stewart Living Omnimedia.

Sold off 3,928 shares

Stewart and ex-stockbroker Bacanovic are accused of lying to investigators about why Stewart sold 3,928 shares of ImClone stock on Dec. 27, 2001, just before it plunged on a decision by the Food and Drug Administration to reject ImClone's application for a cancer drug.

Prosecutors contend Stewart sold her stock after Bacanovic tipped her off, through Faneuil, that ImClone founder Sam Waksal was trying to sell his own holdings.

But Stewart and Bacanovic claim they had a standing agreement to sell Stewart's stock if the price fell to $60. The supposed agreement is the cornerstone of their defense.

Stewart is charged with conspiracy, obstruction of justice and making false statements. Bacanovic is charged with making false statements, making and using false documents, conspiracy, perjury and obstruction of justice -- charges that carry up to 25 years behind bars.

The conspiracy count accuses Stewart and Bacanovic of working together to devise the $60 agreement as a cover story.

Much as she has throughout the six-week trial, Stewart sat expressionless at the defense table Wednesday, sometimes resting her chin on her hand.

Earlier in the trial, the judge dismissed a count of securities fraud that accused Stewart of deceiving Martha Stewart Living Omnimedia investors when she publicly proclaimed her innocence in the scandal.

The company includes magazines, TV programs, Web sites and an array of homemaking products. Stewart stepped down as chief executive after she was indicted last summer, but has remained as chief creative officer.

Separately, the judge agreed Wednesday to tell jurors they may speak with reporters after the verdict; she denied a media request to release jurors' addresses.