Stock Tip A Bad Thing For Martha Stewart

View Document

Stock Tip A Bad Thing For Martha Stewart

The criminal probe of Martha Stewart's controversial sale of her ImClone stock recorded its first conviction today (10/2) when a young stockbroker's assistant pleaded guilty to accepting a gratuity to cover up the alleged insider trading plot. Douglas Faneuil, 27, copped to a misdemeanor for accepting gifts in exchange for misleading investigators probing Stewart's sale of her ImClone stock on December 27, 2001--the day before the announcement of an adverse Food and Drug Administration ruling sent the stock into a tailspin. According to Faneuil, Peter Bacanovic, his boss at Merrill Lynch and Stewart's broker, pressured him to help concoct a story about a supposedly pre-arranged stop loss order to sell Stewart's 4000 ImClone shares when the stock dipped below $60. While Stewart's name does not appear in this criminal information filed against Faneuil--who has agreed to cooperate with prosecutors--there can be little doubt as to the identity of the "tippee" who allegedly received "confidential, material, non-public information" from Merrill Lynch's Bacanovic. (9 pages)

Click here to see Sam Waksal's phone log message from Martha.

Read the Shoe Bomber's incriminating statements.