Martha Broker Appeals

Martha Stewart's (search) former stockbroker asked a federal appeals court Wednesday to overturn his conviction, arguing "toxic" evidence against the celebrity homemaker hurt his own right to a fair trial.  

Lawyers for Peter Bacanovic (search) also told the 2nd U.S. Circuit Court of Appeals that the judge who oversaw the trial unfairly restricted his right to question witnesses and gave the jury misleading instructions.

"Bacanovic's trial alongside Martha Stewart was one of the most highly publicized criminal cases in recent memory, but it was not a fair trial for Bacanovic," his lawyers wrote in a 93-page brief.

Lawyers for Stewart were to file their own appeals papers on Wednesday evening. Those papers were not expected to be made public until Thursday morning.

Bacanovic was convicted of conspiring with Stewart to lie to investigators about why Stewart sold 3,928 shares of ImClone Systems Inc. (search) stock in 2001. Both were sentenced to five months in prison and five months of house arrest.

Both were allowed to stay out of prison while they appealed. Stewart decided to report earlier this month to a West Virginia prison, but the former Merrill Lynch & Co. stockbroker remains free on bail.

Lawyers for Bacanovic argued to the appeals court that Judge Miriam Goldman Cedarbaum erred when she denied Bacanovic's request to be tried separately from Stewart.

Among other things, they argued that some testimony designed to implicate Stewart also unfairly prejudiced the jury against him.

They complained particularly about the testimony of Mariana Pasternak, a longtime Stewart friend who testified Stewart said to her on a resort vacation: "Isn't it nice to have brokers who tell you these things?"

Bacanovic was accused by federal prosecutors of passing a tip through his assistant to Stewart on Dec. 27, 2001, that ImClone founder Sam Waksal was selling his ImClone shares. She sold her shares later that day.

"The failure to sever Bacanovic's trial from Stewart's had very real, severe and highly prejudical consequences," the lawyers wrote.

The appeals papers also raised issues that lawyers for Stewart and Bacanovic had argued before — among that that one juror lied in order to get on the jury and that a key government witness lied on the witness stand.

The witness, Secret Service ink expert Larry Stewart, was acquitted of perjury charges related to his testimony.

Federal prosecutors are expected to oppose both appeals, and the appeals court is not likely to hear the cases until next year.