Potential Jurors Questioned on Day 2 of Stewart Trial

NEW YORK – Domestic style maven Martha Stewart (search) arrived in court Wednesday for a second day of jury selection in her federal stock fraud trial.

One by one, New Yorkers from all walks of life have been taking a seat across from Stewart and answering questions from lawyers trying to decide which 12 will decide her case.

About a dozen of the potential jurors interviewed Tuesday were given the green light by the judge to proceed to the next round of selection, a source close to the case told The Associated Press.

The judge hopes to have about 50 jurors in that next round, the source said. Lawyers will then be allowed to select which of those jurors to eliminate, narrowing the pool to 12 jurors and six alternates for trial, the source said.

Wednesday morning, Stewart ascended the courthouse stairs in a wraparound coat and high-heeled boots and on the arm of lawyer John Tigue. She smiled at reporters but did not speak.

The judge barred reporters from the juror questioning session but ordered a transcript of the first day's questioning to be released later Wednesday. The in-person questions were designed as follow-ups to questionnaires filled out by hundreds of potential jurors two weeks ago.

Opening statements are expected next week.

Stewart is accused of lying to investigators about why she sold nearly 4,000 shares of ImClone Systems Inc. stock Dec. 27, 2001. The next day, the government issued a negative report on an experimental ImClone (search) drug, sending the stock plummeting.

Stewart says she and her ex-stockbroker Peter Bacanovic (search), who is also charged and standing trial with her, had a pre-existing agreement to sell Stewart's shares when the stock price fell to $60.

But prosecutors claim Stewart sold on a tip that ImClone founder Sam Waksal (search) was trying to sell his shares -- then lied to investigators about it. Waksal has admitted he was tipped off to the government report.

On Tuesday, U.S. District Judge Miriam Goldman Cedarbaum addressed the first batch of 33 potential jurors, reading the charges against Stewart and Bacanovic. She asked for their patience for a trial that could last into March.

"Only you can determine what happened," the judge said, "and the verdict as to each count will be your decision alone."

Each potential panelist was questioned individually in the judge's private robing room. Both Stewart and Bacanovic, as well as a jury consultant, defense attorneys and prosecutors, were present.

In court on Tuesday, Stewart and Bacanovic formally re-entered their pleas because the government made last-minute changes to their indictment. Stewart answered "Not guilty" five times, speaking almost inaudibly.

The five counts carry a total prison sentence of 30 years and penalties of $2 million, although Stewart would likely receive far less under federal sentencing guidelines if convicted. The most serious charge is securities fraud.

After Stewart's entrance and the judge's instructions, the potential jurors waited for hours as they were called one at a time for questioning. At least four potential jurors fell asleep.