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About The Battalion. (College Station, Tex.) 1893-current | View Entire Issue (Feb. 5, 2004)
10A Thursday, February 5, 2004 NATION THE BATTALION Broker assistant delivers damaging testimony against Martha Stewart N By Erin McClam THE ASSOCIATED PRESS NEW YORK — In the most damaging testimony yet against Martha Stewart, a former Merrill Lynch assistant said Wednesday that the homemaking mogul ordered all her ImClone Systems stock sold after she learned the company founder was dumping his own shares. Douglas Faneuil, the govern ment’s star witness, said he passed the tip from broker Peter Bacanovic to Stewart when she called on Dec. 27, 2001, on her way to a vacation in Mexico. “Peter thought you might like to act on the information that Sam is selling all of his shares,” Faneuil said he told Stewart, referring to ImClone founder Sam Waksal. Later in the call, Faneuil said he quoted ImClone’s stock price for Stewart, and she eventually declared: “I want to sell.” Faneuil placed the sell order, netting about $228,000 for Stewart. Stewart glanced back and forth at Faneuil and prosecutor Karen Patton Seymour while Faneuil testified, making notes on a legal pad. Bacanovic took notes as well, and appeared to scoff occasionally when Faneuil described parts of the story that included him. As cross-examination began Tuesday afternoon, Faneuil acknowledged that Bacanovic never “explicitly” directed him to lie about the transaction afterward. Faneuil’s testimony is the centerpiece of the government’s case against Stewart and Bacanovic, who are accused of repeatedly lying to investigators by insisting they had a pre-exist ing agreement to sell the stock How much money are we talking... The case against Martha Stewart centers around her sale of ImClone Systems Inc. stock, and whether she deceived investigators. On Dec. 27, 2001, Stewart sold 3,928 shares, some at $58.30 and some at $58.57 for a total of $229,523. SOURCE: Associated Press ImClone’s shares opened at $45.39 or Dec. 31 - after the FDA’s decision on Erbitux. Had she sold her shares then, she would have made $178,291. Foril Texas [iiielii The. ill t SJahor A difference of $51,232 tin at 'I'm f pyk ip ) a ra ead 0 when it fell to $60. The Food and Drug Administration issued a nega tive report about ImClone’s experimental cancer drug the day after the sale, sending the stock down 18 percent. Stewart saved about $50,000 by getting out when she did. Waksal, a former jet-setting New York socialite, is serving a seven-year prison sentence after admitting he instructed his family to sell ImClone shares when he got advance word about the report. Faneuil, 28, also described a frantic effort by Bacanovic in the months after the sale to pres sure him into supporting two separate cover stories. He said the broker offered him a week’s vacation and a trip to Argentina in early 2002. He said Bacanovic first told him the reason for the sale was to generate tax losses to offset capi tal-gains taxes, then claimed he and Stewart had struck the deal to sell when the stock hit $60. In January 2002, as the inves tigation into Stewart’s stock sale was growing, Faneuil described the explanation that an animated tfore. t The, otA withe die I Blair to ii milaG g 'Trao ffleea; Bacanovic gave him in a discus sion in Bacanovic’s office. Faneuil said Bacanovic toll him: “Listen, I’ve spoken K Martha. I met with her, and even one’s telling the same story. This was a $60 stop-loss order, was the reason for her sale. We’re all on the same page, and it’sihf truth. It’s a true story.” Defense lawyers told U.S District Judge Miriam Goldman Cedarbaum that they plan to question Faneuil about his repeated use of marijuana aoi the club drug Ecstasy. Without the jury presentlya Faneuil said in court that he had il taken both drugs employed by Merrill Lynch txn that he had never used while at work. A heated exchange between Seymour and Stewaiti attorney, Robert Morvillo.onh much of the past drug use sho he admissible before the jury. Faneuil agreed in 2002 cooperate with the government in its prosecution of Stewartani Bacanovic, and a routine cte in the agreement requiredfe not to break the law. ora ubles. sists. I t( OStt fork are on us. Get a $10 Visa® Gift Card 1 when you switch to a checking account that has everything you need. Without the surprises. CampusEdge™ checking is free through January 1, 2005. And it will stay free for five years if your parents have an account with Bank of America or as long as you have a monthly direct deposit. There’s no minimum balance. And there are tons of extras. Like a free Stuff Happens™ card, so if you goof up, we’ll refund your overdraft fee —just this once. So get it all, plus $10. Bring this ad into our banking center near Texas A & M University at 111 University Drive E., or visit any of our other banking centers today. i Bankof America^^Higher Standards 'Offer expires 3/15/04. $10 Visa® Gift Card will arrive within three weeks of account opening. Gift Cards are issued by Bank of America, N.A. (USA) under a license by Visa U.S.A. Inc. Fees may apply depending on how and when your card is used. See terms and conditions on gift card carrier. Any applicable taxes are the responsibility of the account holder. Limit one gift card incentive per new account opened. Bank of America, N.A. Member FDIC ©2004 Bank of America Corporation CECTA10 FDA: Fake birth control patch shipped from overseas Web site By Lauran Neergaard THE ASSOCIATED PRESS WASHINGTON —An overseas Internet site is shipping counterfeit versions of a popular Johnson & Johnson birth control patch, versions that won’t provide any protection against pregnancy, federal health officials warned Wednesday. Do not use Ortho Evra patches — or any other drugs — ordered from the Web site www.rxpharma- cy.ws, the Food and Drug Administration warned. While the contraceptive patch is the only drug so far proved a fake from that site, the FDA said consumers should consider its other products sus pect, too. Contact a health provider immediately if you’ve used them, the FDA advised. That Web site is the only known source of the counterfeit patches, said the FDA, which is inves tigating the fraud’s source. The site appeared to have shut down Wednesday, but the FDA couldn’t say how lor had been operating or how many U.S. womei might have ordered the patches. It has no repom of pregnancies linked to them. The fake birth control was shipped from In and the Web site apparently was operated by ane ty called American Style Products of New Delhi, The Web site claimed to be offering Jd FDA-approved patches, complete with picturesof the real thing, said FDA Associate Commissioiw John Taylor. 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