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Bacanovic knew it was against the policy of his firm, Merrill Lynch & Co "But he didn't want his friend Martha Stewart sitting on a stock that was about to be obliterated by bad news Bacanovic is also charged with five counts and faces 25 years S But he described Stewart in December 2001 as weary from the holidays, and finally willing to follow Bacanovic's repeated suggestions to get rid of her ImClone holdings The other witness, acting ImClone CEO Daniel Lynch, briefly discussed the mechanics of the company's application for government approval of Erbitux
Attorneys for Stewart and Bacanovic aimed to convince jurors that the two defendants had done nothing out of the ordinary for a diligent broker and responsible client, arguing that they had decided six days before the ImClone sale to get rid of the stock if it fell to $60 "And so she lied over and over during a key period, to try to keep the price of (her company) from falling "
Stewart attorney Robert Morvillo pointed out that 7 million shares of rapidly falling ImClone were sold on the day Stewart sold hers
She faces up to 30 years in prison on charges that include obstruction of justice and securities fraud, but would likely get a far lighter penalty if convicted
"They have rushed to judgment to bring a case against Ms
With parts of the New York area expected to get 10 inches or more of snow, Cedarbaum canceled Wednesday's proceedings
"He knew he couldn't do it," she said Bacanovic attorney Richard Strassberg said the broker made a paltry $450 on the sale
The government contends that Stewart, on her way to a vacation in Mexico, was tipped that ImClone founder Sam Waksal was trying to dump his own shares, then ordered her own shares sold
The prosecutor told jurors they would hear evidence that Stewart tried to pump up the stock of her own company, Martha Stewart Living Omnimedia, with false accounts of the ImClone investigation in 2002
Seymour noted that the company depended on Stewart's image, and that for every dollar the media company's stock fell, Stewart stood to lose $30 million
"Martha Stewart was determined to put her own interests ahead of her own investors," the prosecutor said Stewart, and in that rush to judgment they have charged an innocent man," Strassberg said
Both defense attorneys characterized Faneuil as a liar who is cooperating with the government to get out of his own prosecution
Prosecutors' version is that Faneuil, young and impressionable, passed the tip about the Waksal sale from Bacanovic to Stewart, then was pressured by Bacanovic to support his version of Stewart's stock sale But, the prosecutor said, he made sure word of Waksal's sale was passed along to Stewart
Morvillo's strategy was clear: The defense lawyer demonized Waksal, the federal government and Douglas Faneuil, Bacanovic's former assistant who will be the star prosecution witness
27, 2001
At one point, Morvillo banged his fist on the front rail of the jury box and said there was no record Stewart and Bacanovic had talked after the stock sale to discuss their supposedly cooked-up $60 story Attorney Karen Patton Seymour said Stewart then conspired with her stockbroker, Peter Bacanovic, to tell a series of cover-up lies about the sale Denying that she was tipped was "another pure and simple lie," Seymour said , to pass information about one client's trades to another, Seymour said
Morvillo never flatly denied that Stewart was tipped to the Waksal sale "
Stewart was almost motionless as the arguments unfolded in front of her, resting her chin on her hand and occasionally tapping an index finger against her lips "
When testimony began Tuesday afternoon, jurors heard from two prosecution witnesses Prosecutor: Stewart Sold Stock on 'Tip'
Jan 27, 9:08 PM EST
Martha Stewart sold stock based on "a secret tip" that no one else had, then told an avalanche of lies to save her reputation and enormous fortune, a federal prosecutor said Tuesday in laying out the case against the homemaking queen
Assistant U "
The jury of eight women and four men listened to three hours of opening statements that outlined starkly different portrayals of Stewart's sale of nearly 4,000 shares in the biotechnology company ImClone Systems on Dec Strassberg said Faneuil was star-struck by his limited contact with Stewart
Stewart's attorney insisted the case was based on "speculation, surmise and guesswork "
The government and defense statements offered a preview of Faneuil's testimony, which â€â€? unless Stewart herself takes the stand â€â€? is likely to be the most important of the trial Waksal later pleaded guilty to securities fraud and has begun serving a prison term of more than seven years
Waksal later admitted he was tipped that federal regulators were about to issue a negative report on ImClone's only drug, the cancer treatment Erbitux
"After hearing the other side of the story," he said, "you decide what's right, whether they should be punished, who's telling the truth Testimony will resume Thursday
"The reason that Martha Stewart dumped her shares is because she was told a secret," Seymour said
Morvillo asked jurors to liken the case to dealing with an angry child who tells a parent that he or she has been hit by a sibling She avoided $45,673 in losses on the shares by selling before the bad news was made public "A secret tip that no other investors in ImClone had They included a Merrill Lynch official who discussed the firm's requirement that it keep its clients' transactions confidential Reasonable parents hear both sides before deciding who is at fault, he said That report sent the stock plummeting
He also said Stewart was telling the truth in an April 2002 interview with investigators in which she said she did not recall such a tip |