Uncle Sam
02-09-2004, 02:49 PM
Poor, poor Martha...
NEW YORK (AP) - The star witness against Martha Stewart testified Monday that he did not believe he was doing anything wrong when he passed her the tip that led to her sale of ImClone Systems stock.
Former brokerage aide Douglas Faneuil, who handled the stock sale in 2001, also testified that the homemaking mogul never encouraged him to lie.
Faneuil was asked by Stewart's lawyer Robert Morvillo whether he knew that he was violating Merrill Lynch & Co. (MTDB) policy when he gave Stewart the tip - that ImClone founder Sam Waksal was trying to dump his shares in the company.
But Faneuil said he thought about the violation only afterward, and he repeated that Stewart's broker at the time, Peter Bacanovic, had ordered him to give Stewart the tip and encouraged him to lie about it later.
"I would say because Peter told me to do it, I did not think I was doing anything wrong," Faneuil said.
Faneuil, 28, was cross-examined by Morvillo for several hours. It was his fourth day on the stand, and the start of the third week of Stewart's trial on charges of obstruction of justice and securities fraud.
On Dec. 27, 2001, Faneuil handled both Stewart's sale of ImClone and an earlier request by Waksal's accountant to transfer Waksal's shares into the account of his daughter, Aliza.
Faneuil has testified that both events made him uneasy. But Morvillo, trying to damage the former assistant's credibility, questioned why he did not immediately alert Merrill Lynch officials that there might have been wrongdoing.
"Were you deliberately attempting to assist two of your customers in violating the insider-trading laws?" Morvillo asked.
"At the time I was attempting to be a client associate, take clients' orders, do what Peter told me to do," Faneuil answered. "I would say no, I was not deliberately attempting."
Stewart and Bacanovic are accused of repeatedly lying to investigators about why Stewart sold her 3,928 shares of ImClone. Stewart also is accused of deceiving investors in her own media company about the ImClone probe.
Faneuil has insisted that Bacanovic ordered him to tip Stewart about Waksal. He says he never knew of any pre-existing arrangement between Stewart and the broker to sell ImClone when it fell to $60, as they have asserted.
Last week, Faneuil testified that Stewart had yelled at him, hung up on him during phone conversations and once even threatened to leave Merrill Lynch because she did not like the music she heard when she was placed on hold.
Faneuil initially supported the defendants' assertion of an informal arrangement to sell at $60, then changed his version of events in June 2002 and agreed to cooperate with the government.
Lawyers for Stewart and Bacanovic have tried to show the jury Faneuil has only told the government what it wants to hear in order to evade prosecution himself.
Faneuil told Morvillo on Monday that he had had about a dozen sessions with federal prosecutors to prepare for his testimony, and he could not recall any questions from prosecutors at the trial that had surprised him.
On Monday, jurors also heard for the first time that Faneuil was reprimanded at Merrill Lynch for being late. Morvillo characterized the reprimand as "probation," but Faneuil called it simply a "warning."
The former assistant has already admitted using cocaine, marijuana and the party drugs Ecstasy and ketamine.
Still, U.S. District Judge Miriam Goldman Cedarbaum blocked Morvillo for a second time Monday from asking Faneuil about his use of marijuana on a 2003 vacation to Jamaica.
Morvillo contends the government should have ended its cooperation agreement with Faneuil - which requires him to obey the law - after that disclosure. The judge said questions about the matter may confuse the jury.
"There is no evidence that the witness changed his version of the facts after the holiday in Jamaica," Cedarbaum said.
Faneuil was to undergo more questioning from Morvillo on Monday afternoon. Then the government was to ask another round of questions, followed by more from Bacanovic's lawyers and possibly a second round from Morvillo.
http://apnews.myway.com//article/20040209/D80JTQ400.html
NEW YORK (AP) - The star witness against Martha Stewart testified Monday that he did not believe he was doing anything wrong when he passed her the tip that led to her sale of ImClone Systems stock.
Former brokerage aide Douglas Faneuil, who handled the stock sale in 2001, also testified that the homemaking mogul never encouraged him to lie.
Faneuil was asked by Stewart's lawyer Robert Morvillo whether he knew that he was violating Merrill Lynch & Co. (MTDB) policy when he gave Stewart the tip - that ImClone founder Sam Waksal was trying to dump his shares in the company.
But Faneuil said he thought about the violation only afterward, and he repeated that Stewart's broker at the time, Peter Bacanovic, had ordered him to give Stewart the tip and encouraged him to lie about it later.
"I would say because Peter told me to do it, I did not think I was doing anything wrong," Faneuil said.
Faneuil, 28, was cross-examined by Morvillo for several hours. It was his fourth day on the stand, and the start of the third week of Stewart's trial on charges of obstruction of justice and securities fraud.
On Dec. 27, 2001, Faneuil handled both Stewart's sale of ImClone and an earlier request by Waksal's accountant to transfer Waksal's shares into the account of his daughter, Aliza.
Faneuil has testified that both events made him uneasy. But Morvillo, trying to damage the former assistant's credibility, questioned why he did not immediately alert Merrill Lynch officials that there might have been wrongdoing.
"Were you deliberately attempting to assist two of your customers in violating the insider-trading laws?" Morvillo asked.
"At the time I was attempting to be a client associate, take clients' orders, do what Peter told me to do," Faneuil answered. "I would say no, I was not deliberately attempting."
Stewart and Bacanovic are accused of repeatedly lying to investigators about why Stewart sold her 3,928 shares of ImClone. Stewart also is accused of deceiving investors in her own media company about the ImClone probe.
Faneuil has insisted that Bacanovic ordered him to tip Stewart about Waksal. He says he never knew of any pre-existing arrangement between Stewart and the broker to sell ImClone when it fell to $60, as they have asserted.
Last week, Faneuil testified that Stewart had yelled at him, hung up on him during phone conversations and once even threatened to leave Merrill Lynch because she did not like the music she heard when she was placed on hold.
Faneuil initially supported the defendants' assertion of an informal arrangement to sell at $60, then changed his version of events in June 2002 and agreed to cooperate with the government.
Lawyers for Stewart and Bacanovic have tried to show the jury Faneuil has only told the government what it wants to hear in order to evade prosecution himself.
Faneuil told Morvillo on Monday that he had had about a dozen sessions with federal prosecutors to prepare for his testimony, and he could not recall any questions from prosecutors at the trial that had surprised him.
On Monday, jurors also heard for the first time that Faneuil was reprimanded at Merrill Lynch for being late. Morvillo characterized the reprimand as "probation," but Faneuil called it simply a "warning."
The former assistant has already admitted using cocaine, marijuana and the party drugs Ecstasy and ketamine.
Still, U.S. District Judge Miriam Goldman Cedarbaum blocked Morvillo for a second time Monday from asking Faneuil about his use of marijuana on a 2003 vacation to Jamaica.
Morvillo contends the government should have ended its cooperation agreement with Faneuil - which requires him to obey the law - after that disclosure. The judge said questions about the matter may confuse the jury.
"There is no evidence that the witness changed his version of the facts after the holiday in Jamaica," Cedarbaum said.
Faneuil was to undergo more questioning from Morvillo on Monday afternoon. Then the government was to ask another round of questions, followed by more from Bacanovic's lawyers and possibly a second round from Morvillo.
http://apnews.myway.com//article/20040209/D80JTQ400.html