Thursday, February 12, 2004

Stewart jury hears SEC tape

By Erin McClam
The Associated Press

NEW YORK - Jurors at the Martha Stewart trial donned headphones Wednesday and listened to an hour of recordings in which her broker explained her sale of ImClone Systems stock - a tale the government says is laced with lies.

In the recording, from an interview with the Securities and Exchange Commission in February 2002, broker Peter Bacanovic describes a plan that he and the domestic mogul made to sell ImClone when it fell below $60 per share.

"How low does this have to go before you're prepared to part with this?" Bacanovic tells the SEC he asked Stewart.

When Stewart said she didn't know, Bacanovic said he suggested, "Well, how about $60 a share? Does that sound reasonable?" He said she answered, "Yes, sure, $60."

The government contends that Stewart and Bacanovic hatched the story to cover the real reason for the sale Dec. 27, 2001 - that Bacanovic sent word to Stewart that ImClone CEO Sam Waksal was trying to dump his shares.

Bacanovic also claimed in the interview that he never told Stewart that ImClone stock was falling when he left a message for her Dec. 27 - only that he and his assistant "gave her the price of the stock."

That statement contradicts testimony earlier this week from Stewart's personal assistant.

Stewart ordered the sale of her ImClone stock later that day in a call to Douglas Faneuil, Bacanovic's assistant. The stock plummeted soon after when the company announced negative news about ImClone's experimental cancer drug.

Stewart and Bacanovic are each charged with lying to investigators about the ImClone sale. Stewart is also charged with securities fraud, accused of misleading investors in her own company, Martha Stewart Living Omnimedia.

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