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   Martha Stewart

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Topic: Martha Stewart (Read 467 times)

Rhune
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Martha Stewart
« on: Oct 2^nd, 2002, 2:03pm »

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NEW YORK (Reuters) - The brokerage assistant involved in an insider-trading probe surrounding home decorating expert Martha Stewart pleaded guilty to a misdemeanor on Wednesday, cutting a deal with prosecutors that signals further legal trouble for Stewart.

The assistant, Douglas Faneuil, entered the plea in Manhattan federal court, where he was charged with accepting gifts in exchange for not telling authorities what he knew about a controversial stock sale currently under investigation.

"I did not truthfully reveal everything I knew about the actions of my supervisor," Faneuil said in court, adding that he also held back information as to why a Merrill Lynch client sold 3,928 shares of ImClone Systems Inc. a day before the company announced damaging news that sent its shares tumbling.

That number of shares is the same amount of ImClone stock that Stewart sold on Dec. 27, 2001, the day before the biotech company said its experimental cancer drug, Erbitux, would not receive marketing approval from the government.

Faneuil was an assistant to Stewart's broker at Merrill, Peter Bacanovic. Both Faneuil and Bacanovic have been on paid leave from Merrill since June, shortly after news surfaced that Stewart had sold her ImClone stake.

Cooperation from Faneuil, who faces a maximum sentence of one year in prison, is likely to be a significant boost for federal investigators trying to determine whether Stewart had inside information when she sold her ImClone stock.

"If (Stewart) wasn't having particular connections to (Faneuil) it may mean very little," said Stephen Ryan, a former federal prosecutor and a partner at Manatt Phelps & Phillips. "On the other hand, it might mean quite a lot that there's a domino (effect)."

Faneuil was released from court on his own recognizance.

A spokeswoman for Stewart had no comment and a spokeswoman for her company also declined comment.

Stewart, head of Martha Stewart Living Omnimedia Inc. and a New York Stock Exchange ( news - web sites) board member, maintains her stock sale was lawful and was triggered by a prior agreement with Bacanovic to sell her ImClone shares if the stock's price fell below $60 a share.

During the plea hearing, Faneuil told U.S. Magistrate Judge Kevin Fox that he had accepted money and other considerations including the continuation of compensation, an additional week of vacation and an airline ticket in exchange for holding back information from the FBI ( news - web sites) and the Securities and Exchange Commission ( news - web sites).

The complaint against Faneuil alleges that the gifts and other considerations came from a "financial advisor" at Merrill.

Faneuil was interviewed by SEC attorneys on Jan. 3 and by the SEC and FBI on March 7.

The complaint does not name Stewart or Bacanovic but clearly refers to them, saying Faneuil worked for a financial advisor who knew that Samuel Waksal, former chief executive of ImClone, was trying to sell ImClone shares.

Waksal was named in a 13-count indictment on August 7, accusing him of bank and securities fraud and obstruction of justice. He pleaded not guilty on Aug. 12. He was first charged in an insider trading complaint filed by prosecutors in June.

Shares of Martha Stewart Living were down about 5 percent at $6.89 in early afternoon trading on the New York Stock Exchange Wednesday, not far from a 52-week low.

Both Faneuil and Bacanovic have been on paid leave from Merrill Lynch since June, shortly after news surfaced that Stewart dumped her ImClone stake.

After the plea hearing, Faneuil's lawyers spoke to reporters but Faneuil would not comment.

One of the lawyers, Marvin Pickholz, said: "Mr. Faneuil is pleased that finally his family, his friends, his coworkers and the public have a clearer picture of what occurred in connection with ImClone."

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Rhune
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Re: Martha Stewart
« Reply #1 on: Oct 7^th, 2002, 8:40am »

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October 4, 2002
In the Soup: Martha Mess Grows Messier
STEPHEN M. SILVERMAN

Martha Stewart, under investigation by the Justice Department over her sale of ImClone stock, resigned Thursday from the board of the New York Stock Exchange as questions begin to arise about whether she will also resign from her position as CEO of Martha Stewart Living Omnimedia Inc.
Stewart, 60, had joined the NYSE's 27-member board of directors in June 2002. Her term was set to expire next year.

In a statement, Stewart said she quit because she did not want "media attention currently surrounding me to distract from the important work of the NYSE."

Stewart's resignation came one day after Douglas Faneuil, an assistant to Stewart's stockbroker at Merrill Lynch, pleaded guilty to a misdemeanor charge that he was paid off to stay mum about an insider stock tip allegedly given to the domestic diva.

Last December, Stewart unloaded nearly 4,000 shares of ImClone stock just before the biotech company's stock price plunged because the Food and Drug Administration would not approve its new cancer drug. She claimed that she had a standing order with her broker to sell the shares should they go below $60 and insists there was never anything unlawful about the transaction.

Even so, Stewart's resignation, as analyzed by Columbia University Law School professor John Coffee, is seen as a sign that "she finally realized the walls are closing in," reports Friday's New York Times. Discussing the possibility of Stewart having to leave her own company, Coffee said, "There obviously has to be a discussion going on in her own board -- every other CEO who has been indicted has resigned."

T.K. MacKay, an analyst covering Stewart's company stock for the Chicago-based Morningstar research firm, told the Times, "The stock should be avoided. We have seen evidence that her disintegrating reputation is taking a toll on the company's business."

On Thursday, after she announced her resignation from the NYSE board, Stewart's stock fell, closing down more than 8 percent, to $6.21, its lowest price ever.

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Rhune
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Re: Martha Stewart
« Reply #2 on: Oct 22^nd, 2002, 9:37am »

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NEW YORK (AP) - Securities and Exchange Commission (news - web sites) lawyers have told Martha Stewart that they are ready to file civil securities fraud charges against the home decor entrepreneur for her alleged role in an insider trading scandal, a source told The Associated Press on Tuesday.

The SEC gave Stewart a formal notice in recent weeks of its intent to file civil charges, said a source close to the investigation, speaking on condition of anonymity.

Stewart's lawyers reportedly have filed a response with the SEC.

In most cases, such a notice leads to filing of a civil lawsuit by the SEC.

The possibility of civil charges represents a potentially devastating scenario for Stewart, who is accused of selling shares of ImClone Systems after getting tipped off about negative news surrounding one of its promising new cancer drugs.

Stewart has denied any wrongdoing and has not been charged, but the scandal has fractured her multibillion-dollar media empire. Her company's stock has tumbled 60 percent since she was linked to the scandal, and Stewart resigned earlier this month from the board of the New York Stock Exchange (news - web sites).

Stewart's lawyers referred calls to her public relations representative, Allyn Magrino, who declined to comment on the development. Martha Stewart Living Omnimedia Inc., where Stewart is chief executive and chairman, also declined to comment, as did an SEC spokesman.

Shares of Martha Stewart Living Omnimedia plunged more than 14 percent, or $1.10, in extended-hours trading Monday.

Stewart is already under investigation by the Justice Department (news - web sites), which is probing whether she lied to lawmakers about her sale of ImClone shares.

She sold nearly 4,000 shares of ImClone on Dec. 27 - one day before the Food and Drug Administration (news - web sites) announced it would not review the biotechnology company's cancer drug, Erbitux. ImClone's stock subsequently plummeted.

Stewart has maintained that she and her broker Peter Bacanovic had a standing order to sell the shares if the stock dropped below $60.

Stewart is friends with Sam Waksal, founder and former chief executive of ImClone, who pleaded guilty last week to several counts of bank fraud, securities fraud, conspiracy to obstruct justice and perjury.

Waksal did not implicate Stewart, and his plea was not part of an agreement to cooperate with prosecutors - rare in a criminal plea.

Douglas Faneuil, Bacanovic's assistant, initially supported Stewart's and Bacanovic's account, but later admitted he withheld information when first interviewed by investigators from the SEC and the FBI (news - web sites).

Earlier this month, Faneuil pleaded guilty as part of a deal to testify against Stewart and others who might be charged in connection with sales of ImClone shares.

Faneuil admitted to a misdemeanor charge of receiving money and other valuables "as consideration for not informing."

Also Monday, U.S. Attorney James Comey filed papers in Manhattan federal court seeking to seize more than $10 million from Waksal's family members. He admitted tipping off his daughter, Aliza Waksal, to sell her ImClone shares just before the share price plunged.

During his plea, Waksal insisted his daughter and father, Jack Waksal, had done nothing wrong. Prosecutors say Jack Waksal sold more than $8 million of ImClone shares in five separate transactions Dec. 27-28.

Aliza Waksal sold $2.4 million worth of ImClone shares on Dec. 27.

Though neither Aliza nor Jack Waksal has been charged, prosecutors are trying to force them to forfeit all of that money.

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Rhune
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Re: Martha Stewart
« Reply #3 on: Nov 18^th, 2002, 9:22am »

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Martha Missing from Holiday Ads
Sun, Nov 17, 2002 11:19 AM PDT

LOS ANGELES (Zap2it.com) - She hasn't been found guilty of anything yet (or for that matter, formally charged), but that's not keeping domestic doyenne Martha Stewart from adopting a low profile policy this holiday season.

Not only has she pulled out of doing her usual televised special, but Kmart has decided to keep their holiday ad campaign Martha-free, according to the New York Times.

Of the 26 television ads that have been created to promote her line of products since 1997, Stewart -- whose Everyday line generated $1.5 billion for Kmart last year -- has appeared in all but two of them. However, this year is all about Santa Claus on screen, while Stewart will contribute a voice over.

Meanwhile, the newly popular "dancing guy" from Kmart's Joe Boxer ads will be the featured performer in two ads in the upcoming months. In the first, actor Vaughn Lowery will do his dance clad in a gift-wrapped box, followed by a pair of red boxers. In the second, he does an impression of a reindeer while accompanied by several female dancers as snow falls.

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Tinkerbell
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Re: Martha Stewart
« Reply #4 on: Nov 28^th, 2002, 10:38pm »

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on Nov 18^th, 2002, 9:22am, Rhune wrote:

Martha Missing from Holiday Ads
Sun, Nov 17, 2002 11:19 AM PDT
Meanwhile, the newly popular "dancing guy" from Kmart's Joe Boxer ads will be the featured performer in two ads in the upcoming months. In the first, actor Vaughn Lowery will do his dance clad in a gift-wrapped box, followed by a pair of red boxers. In the second, he does an impression of a reindeer while accompanied by several female dancers as snow falls.

i have just seen this ad. pretty darn cute ad! i saw the one of him dancing in the gift box.

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