Stewart Recruits More Legal Talent For ImClone Case
Wednesday July 3, 12:24 am Eastern Time
As Federal Prosecutors ramp up their inquiry into Martha Stewart's stock trading, the lifestyle-and-media entrepreneur has called on some high-profile legal talent to represent her, Wednesday's Wall Street Journal reported.
Ms. Stewart has hired noted criminal-defense attorney Robert Morvillo as investigators look into allegations that she had "inside" information when she sold stock of ImClone Systems (NasdaqNM: IMCL - News) Inc. , and then sought to obstruct justice by making false statements to federal prosecutors looking into the matter.
Mr. Morvillo, 64 years old, will join Ms. Stewart's already high-powered legal team. The team comprises lawyers from Wachtell, Lipton, Rosen & Katz, in New York, and Arnold & Porter, in Washington , D.C ., indicating the seriousness of the government investigation in her eyes and those of her attorneys, people close to the matter say. Ms. Stewart has steadfastly denied any wrongdoing.
Mr. Morvillo, a former assistant U.S. attorney, has been involved in other high-profile white-collar criminal cases. He has been involved in numerous insider-trading cases, and has done work for Merrill Lynch & Co ., helping to represent the firm when it was under scrutiny by New York State Attorney General Eliot Spitzer for conflicts of interest involving stock research analysts. Mr. Morvillo recently represented a former Lehman Brothers Holding broker charged with helping launder money for a Mexican drug cartel. Another client was Randolph Pace, a small-brokerage executive who was recently sentenced to more than eight years in prison, for allegedly manipulating initial public stock offerings.
In a statement, Wachtell Lipton lawyers John Savarese and Larry Pedowitz said: "Given the allegations swirling around Ms. Stewart, we decided to add Bob to our team. He is one of the best lawyers in the country and we're glad to have his help."
The U.S. attorney's office in Manhattan is looking into the circumstances of Ms. Stewart's sale of nearly 4,000 shares of ImClone on Dec. 27 , the day before the company announced negative news about a cancer-fighting drug that sent shares into a tailspin.
ImClone's former chief executive, Samuel Waksal, a friend of Ms. Stewart's, has been charged with insider trading for allegedly tipping off family members and trying to sell his shares before the news was made public. The case against Ms. Stewart recently broadened after the assistant to her broker cast doubt on her explanation that she sold the stock because of a previous arrangement to unload ImClone shares when the price fell below $60.
Ms. Stewart drew scrutiny because she is a close friend of Dr. Waksal's; he has denied the charges that he engaged in insider trading.
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Wall Street Journal Staff Reporters Charles Gasparino, Jerry Markon, Geeta Anand and Matthew Rose contributed to this report. |
