An article on Tyco's ex-General Counsel's acquittal is available here. This, like many other white collar criminal prosecutions, turned on the defendant's credibility. The article states:
"The centerpiece of their case was Belnick himself, who took the stand for several days of testimony."
"On direct examination by Weingarten, he presented himself as an honest lawyer and outsider at Tyco who failed to establish a rapport with Kozlowski and encountered active hostility from other Tyco executives and members of the board of directors. On the stand, Belnick explained how he slowly instituted policies and procedures at the company. He also described how he hired and worked with lawyers at Washington, D.C.'s Wilmer, Cutler & Pickering to resolve the SEC investigation. He said Kozlowski had promised him the $17 million bonus on the investigation's successful conclusion."
"Throughout his time on the stand, Belnick had acknowledged that his compensation was high but he said Tyco was known for rewarding performance. He said he relied on Kozlowski's word that the CEO had the ability to set the general counsel's compensation. Noting that he was a litigator rather than a securities lawyer, he said he willingly deferred to Swartz on issues like whether he needed to disclose his loans or bonuses on the company's proxy statements."
In other news...ABC has the inside scoop on Martha Stewart's appeal, led by former acting Solicitor General Walter Dellinger. The article notes several alleged points of error, including:
"The perjury by Juror Number 4 (Chapell Hartridge), who failed to disclose a 1997 arrest for domestic assault and an attempted robbery conviction for his son, and the decision to not prosecute."
"The perjury by Larry Stewart, the Secret Service national ink expert, and the defense assertion that he is a member of the prosecution and that at least five other persons in the Secret Service knew of the perjury. Additionally, the defense asserts that it would have been reasonable for the government to have known of the risk of prejudicial testimony well before the end of trial, if not before the testimony was given."
"In the government opening argument the assertion of an "insider tip" came up 17 times, yet the judge had ruled that the defense could not address the issue of insider trading before the jury. Dellinger is expected to state that when the prosecution talked about secret tips, they were using code for insider trading which the jury would understand."
"That testimony by Stewart's best friend Mariana Pasternak that asserted Stewart knew when to sell her stock was allowed to stand, with no instruction to the jury, despite the fact that later Pasternak said she might have "imagined" the critical conversation."
"That Martha Stewart's constitutional right to confront witnesses against her was violated when the prosecution introduced statements her co-defendant Peter Baconovic made to investigators, in which he said that he had never had a conversation with Martha's business adviser in which they agreed to sell her shares of ImClone if the price fell below $60."
"That the judge did not order a hearing to determine if the prosecution was aware of Larry Stewart's perjured testimony."
"That the inclusion of the securities fraud charge unfairly prejudiced the jury."
Each point other than Nos. 3 and 5 seem to me to be clearly harmless error. Point 3 is another example of prosecutorial misconduct - but it's of the kind that courts ignore each day. Point 5 has potential in light of Crawford v. Washington (holding that Confrontation Clause prohibits out-of-court statements offered against a defendant unless the defendant first has the right to cross-examine the declarant). I do not know what role Baconovic's statements played in her conviction, though as first pass the statements seem crucial to Stewart's conviction. Martha Stewart was convicted of lying to investigators when she told them that she had a stop-loss order in place. Apparently Baconovic said no such order was in place. Thus, Baconovic's statement would seem pretty damn crucial to a conviction by providing direct evidence that no such order was in place, and therefore Marth was lying when she told investigators otherwise. Also, note that Martha Stewart was convicted on March 5, 2004 (and presumably the statements were entered against her well before that). Crawford was rendered on March 8th. To win on this point her defense team will have to prevail on the argument that Crawford applies retroactively. I look forward to reading the briefs.
The Stewarts case is a lesson in the preciousness of liberty. Martha will face, at most, 16 months in a relatively decent federal prison. She has spent millions on her legal defense: she will spend millions more. Good luck, St. Martha.