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Stewart trial opens as she denies counts

NEW YORK -- Martha Stewart waved to her supporters, strode into a Manhattan courthouse, and repeated pleas of not guilty at the formal start of her stock-trading trial yesterday.

The 62-year-old millionaire guru of gracious living stood in court and nodded at the first batch of jurors, who were interviewed one by one in a judge's private robing room. The judge was worried that they might be less forthcoming with answers if reporters were in the room.

"Not guilty," Stewart said five times, speaking almost inaudibly and nodding as she reentered her plea to five criminal counts related to her 2001 sale of nearly 4,000 shares of ImClone Systems.

Stewart stepped out of a car and said "good morning" while passing a phalanx of cameras. She then climbed the courthouse steps and briefly waved to two fans standing in the freezing cold, including a man wearing a "Save Martha" chef's hat and apron.

In court, she produced a pen and notebook and listened to US District Judge Miriam Goldman Cedarbaum instruct the potential jurors on their role in the trial.

Cedarbaum told them that opening statements will probably begin next week. The trial is expected to last into March. Lawyers declined to say how many jurors were qualified yesterday. Interviews were expected to continue today.

Stewart faces 30 years in prison and penalties of $2 million, although she would likely receive far less under federal sentencing guidelines if convicted.

Stewart is the highest-profile figure to stand trial since the government began its crackdown on corporate corruption two years ago. She became the queen of home decor and amassed a fortune as the head of Martha Stewart Living Omnimedia, which stamped her style on everything from magazines and recipes to bed linens and bath towels.

Her legions of supporters argue she is being targeted because of her celebrity status.

"This is a witch hunt," said Linda Smith, who took a two-hour bus ride from New Jersey to stand outside the courthouse in support of Stewart. "Martha's public believes her, believes in her innocence."

Imclone stock fell sharply the day after Stewart's sale on a negative government report about an ImClone cancer drug. Prosecutors say Stewart lied to investigators to cover up that her stock sale was prompted by a tip that ImClone founder Sam Waksal was trying to sell his shares after getting advance word of the report.

Stewart claims she and her stockbroker had a preexisting order to sell ImClone stock when it fell to $60 per share.

The broker, Peter Bacanovic also is charged with five criminal counts in the trial. Bacanovic, 41, also reentered a plea of not guilty to each count against him.

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