NEW YORK Claim of innocence brings another charge to Stewart

Prosecutors say it was an attempt to inflate the value of her company's stock.
NEW YORK (AP) -- Prosecutors tucked a highly unusual twist into their indictment of Martha Stewart -- a charge that she committed a crime simply by declaring her own innocence.
Prosecutors say the domestic guru committed securities fraud -- that is, she deliberately tried to inflate the stock of her own company -- when she stood up in public last summer and denied engaging in insider trading.
"I was a little surprised at that," said Richard A. Serafini, a former economic crimes prosecutor in New York. "There's kind of a natural tendency when you're confronted with something to deny it. Now they're charging it as market manipulation."
Legal experts said the charge is a high-risk move designed to convince a jury that Stewart hurt thousands of ordinary stockholders in Martha Stewart Living Omnimedia by trying to cover up her legal problems.
Stewart was indicted Wednesday on five federal counts -- including obstruction of justice, conspiracy and lying to investigators -- tied to her December 2001 sale of nearly 4,000 shares of ImClone Systems stock. She pleaded innocent to all charges, but could go to prison for several years if convicted. Her former stockbroker, Peter Bacanovic, was also indicted and pleaded innocent.
Stewart dumped her ImClone stock one day before the government issued discouraging news about an ImClone cancer drug. The government says Stewart had inside knowledge the stock was about to plummet.