NEW YORK — Just days before deliberations, the judge in the Martha Stewart trial dropped the most serious charge against the homemaking mogul.

Prosecutors had alleged Stewart committed securities fraud when she maintained her innocence in the midst of the investigation in press interviews and at a midyear meeting for Martha Stewart Living Omnimedia (MSLO) before analysts and investors. The government had set out to argue that Stewart's statements were not only false, but that they were intended to prevent the stock price of MSLO from plummeting.

"I hold that a reasonable juror could not, without resorting to speculation and surmise, find beyond a resonable doubt that Stewart's purpose was to influence the market in MSLO securities," Cedarbaum wrote in her decision.

The defense has maintained Stewart not only was telling the truth, but also that she had a right to speak out publicly about the charges after the government leaked word of the investigation to the press.

Those arguments were not enough to get the charge dismissed at the onset of the trial, but Cedarbaum later ruled that prosecutors could not call expert witnesses to testify that Stewart's actions constituted securities fraud.

Stewart's defense lawyer, Robert Morvillo, argued Monday that prosecutors failed to make their case on the securities fraud charge. The judge held off making a decision until her ruling Friday morning.

With closing arguments set to begin Monday, prosecutors' inability to argue for a conviction on the dismissed charge could give the defense an added advantage.

Jurors are not privy to motions and rulings made outside their presence, but may recall during lead prosecutor Karen Patton Seymour's opening statement that Stewart was charged with securities fraud, creating a loose end they can no longer address.

Stewart still faces four other charges relating to her Dec. 27, 2001, sale of stock in biotech firm ImClone, all of which carry sentences of up to five years in prison.

The judge refused to throw out the conspiracy charges against Stewart and her co-defendant and former stockbroker, Peter Bacanovic. Prosecutors contend Stewart and Bacanovic tried to cover up the reasons for the stock trade.

The government claims Bacanovic learned that another client, ImClone CEO Sam Waksal, sought to unload $7.5 million worth of stock in the company and that the broker then had the information passed along to Stewart.

Friday's decision comes after more than a month of testimony in Manhattan's federal court.

Stewart and the other parties were in court Friday hammering out jurors' instructions in Cedarbaum's chambers.