The defense lawyers' best chance may be to argue that U.S. District Judge Miriam Goldman Cedarbaum's rulings violated the defendants' constitutional rights, legal analysts said.

"The rules of evidence provide the judge with vast discretion in managing the evidence" that goes to a jury, said Barry Boss, a defense lawyer not involved in the case. "But you do have a Sixth Amendment and a due process right to articulate your chosen defense."

....Lawyers for both defendants declined through spokesmen to comment for this article, but sources familiar with Stewart's team said Cedarbaum's decision to limit what defense lawyers could tell the jury will probably be central to her case before the U.S. Court of Appeals for the 2nd Circuit.

Cedarbaum not only refused to allow a defense expert to testify on insider-trading law, she also told Morvillo he could not argue that Stewart was being unfairly singled out for prosecution because of her celebrity.

Stewart's lawyers also plan to attack the prosecution's argument that Stewart and Bacanovic's statements to investigators about what happened on Dec. 27 were false because they "concealed" the true reason for the trade.

....The defense teams' argument on the "concealment theory" centers on the fact that there are no official records of what questions Stewart and Bacanovic were asked by government investigators, legal analysts said.

For example, if Stewart was asked, "Tell us everything that went into your decision to sell ImClone on Dec. 27," an answer that failed to mention the tip about the Waksals' trading would almost certainly qualify as concealment. But if she was asked, "What was the main reason you sold?" her answer about the $60 arrangement might not meet the legal definition of a false statement. The jury never specifically found that the $60 arrangement did not exist.

The defense therefore could argue that without a written or taped record of the questions there was not enough evidence to prove that the statements were false beyond a reasonable doubt. [Wahsington Post]

Newsweek has a thumbnail analysis of the case:

Martha Stewart's high-powered defense team got it wrong. They assumed prosecutors failed to make their case, and put up no defense. Here's what happened:

Codefendant: PETER BACANOVIC
His lawyers did more harm than good for Martha. Every witness they called seemed to turn against them and ended up backing the prosecution. Oops.

The Defense: ROBERT MORVILLO
Martha's blue-chip defense attorney gambled by not putting Martha on the stand. A juror said later that they wanted to hear her side.

The Prosecutor: KAREN PATTON SEYMOUR
She kept the case simple, focusing on basic facts and not celebrity. Plus, her low-key manner and slight Texas twang were a good casting call against the stone-silent Martha.

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