Why Is Martha Stewart Smiling?

After months of agonized waiting for her high-profile trial to begin, Martha Stewart looked almost upbeat last week as she finally had her first days in court. Sporting clean-line pantsuits and clutching a Hermes Birkin handbag (starting price: $6,000), she looked--for once--perfectly out of place in an otherwise musty courtroom in downtown Manhattan. And when the judge unexpectedly delayed for a week testimony from Douglas Faneuil, a key government witness, Stewart left the courthouse with a smile on her face.

The smile may not last long. The charges against Stewart of federal securities fraud and obstructing a government investigation relating to...

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