Another Favorable Ruling for Martha

By Todd Peterson

Wednesday February 18, 2004 11:16 AM EST

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It was a small but significant victory for Martha Stewart on Tuesday, as the judge presiding over her case blocked another bit of evidence in the prosecution's case against the domestic diva.

U.S. District Judge Miriam Goldman Cedarbaum told prosecutors they could not use a voicemail message that Stewart's stockbroker had left for her on the day she was first interviewed by government investigators, the Associated Press reports.

"The fact that (Peter Bacanovic) tried to contact her really isn't evidence of anything, other than that they talked to each other sometimes," Judge Cedarbaum said in issuing her ruling.

Stewart and Bacanovic are codefendants in the government's case concerning Stewart's sale of her shares of ImClone Systems stock on Dec. 27, 2001. The government alleges that Bacanovic tipped off Stewart about the impending drop in the stock's price and that the two then conspired to lie to investigators about the sale.

Stewart is also charged with securities fraud for allegedly lying to investors in her company, Martha Stewart Living Omnimedia, by proclaiming her innocence while under investigation.

Bacanovic left the voicemail message in question on the morning of Feb. 4, 2002. Stewart granted her first interviews to government officials later that day, and the prosecution claims the message was an indication of the Bacanovic's intentions to work out a cover story, AP reports.

But Judge Cedarbaum disagreed and stopped the government from entering the message as evidence in the case. The judge also limited the prosecution's argument of other calls between Stewart and Bacanovic on Jan. 25, 2002, the day on which Stewart was told prosecutors wanted to interview her.

The government did get a bit of good news Tuesday when Judge Cedarbaum ruled that she would allow the testimony of friends of the prosecution's witness Douglas Faneuil. Faneuil was the assistant to Stewart's broker who earlier testified that Bacanovic ordered him to tip off Stewart about ImClone's price. The judge said that Faneuil's friends may testify as to what the young assistant told them prior to his cooperation with the government.

The prosecution is expected to rest its case later this week. The defense's case may take as long as a couple weeks, AP reports.