Did Martha Hype Stock Price?

Prosecutors in the fraud case against Martha Stewart showed the jury a stock chart Wednesday in an attempt to prove that she propped up the price of her own company by lying to investors about her sale of ImClone Systems stock.

The stock chart showed spikes in the price of Martha Stewart Living Omnimedia immediately after Stewart issued statements denying wrongdoing in June 2002.

Stewart has insisted she had a standing agreement with her stockbroker Peter Bacanovic to sell ImClone when it fell to $60.

The government claims the real reason for the sale was that Stewart was tipped that ImClone founder Sam Waksal was trying to sell his shares. Stewart sold on Dec. 27, 2001, just before a negative government decision on an ImClone cancer drug sent the ImClone stock price down.

Prosecutors say that later, after the scandal broke, Stewart illegally tried to prop up the stock price of Martha Stewart Living Omnimedia — and therefore save her tremendous wealth — when she publicly proclaimed her innocence.

That, according to prosecutors, amounted to securities fraud, which carries a potential 10-year prison term. Four other counts against Stewart accuse her of lying to investigators about why she sold ImClone stock.

Earlier Wednesday, Stewart's lawyer showed jurors a slew of two-year-old news reports that speculated she sold ImClone stock on insider information and even was romantically linked to its now-jailed CEO.

The defense introduced the material to show that Stewart was simply trying to discredit inaccurate reports, and making smart business decisions, in the summer of 2002 when she issued statements saying her ImClone sale was proper.

Stewart was never charged with criminal insider trading, and she has denied having any romantic relationship with Waksal.

The news reports, introduced by Stewart lawyer Robert Morvillo, are from early June 2002, when word leaked that Congress was investigating whether Stewart sold ImClone on insider information.

In one, a Minnesota Public Radio anchor refers to a purported romantic link between Stewart and Waksal and says: "It looks like Martha Stewart may have kissed and sold." In another, Rep. James Greenwood, R-Pa., says Stewart's ImClone sale "raises the specter of insider trading."

Also Wednesday, a federal appeals court ruled that the judge overseeing the trial was wrong to bar the media from jury selection.

U.S. District Judge Miriam Goldman Cedarbaum said she kept reporters out because she was worried prospective jurors might be less candid if they knew reporters were watching.

But the 2nd U.S. Circuit Court of Appeals called the media "a vital means to open justice" and said the judge had not met the heavy burden required to close jury selection, which is usually open to the media.

The ruling came too late to make a difference in the Stewart trial, which began last month. But the appeals court said the issues would probably arise in other trials and were too important to overlook.

Cedarbaum has ruled that friends of the government's star witness will be allowed to tell jurors what he confided to them just after the domestic diva dumped ImClone Systems stock.

The prosecution also plans to call a friend of Stewart's to wrap up its case.

Most of the evidence and testimony so far has revolved around telephone calls and messages between Stewart and her broker and co-defendant Peter Bacanovic, reports CBS News Correspondent Cami McCormick.

The judge has severely limited what the prosecution can present, and barred the government from admitting into evidence a voice mail Bacanovic left for Stewart on Feb. 4, 2002. That was the same day she was first interviewed by investigators looking into her ImClone stock sale.