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   Witness: Stewart said ‘Sell all my shares’

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Topic: Witness: Stewart said ‘Sell all my shares’ (Read 289 times)

Rhune
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Witness: Stewart said ‘Sell all my shares’
« on: Feb 4^th, 2004, 6:36pm »

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Witness: Stewart said ‘Sell all my shares’

The prosecution's key witness at the Martha Stewart trial says she sold her ImClone shares after his tip, contradicting her story. A brutal cross-examination was expected in the afternoon.

By MSN Money Staff

This is how Douglas Faneuil describes the key event in Martha Stewart’s sale of her ImClone shares.

In testimony today, the former brokerage assistant at Merrill Lynch said his boss Peter Bacanovic -- Stewart’s broker and the co-defendant in her obstruction of justice trial -- told him to call Stewart when they learned that ImClone chairman Sam Waksal and his family were selling his shares in advance of a bad FDA report. At the time, Bacanovic was on vacation in Florida.

It took a bit of time to find Stewart, who was jetting to Mexico for a short vacation of her own on Dec. 27, 2001. When Faneuil finally reached her, he testified, "I told her that Sam was trying to sell." Stewart then asked, "All of his shares?" When Faneuil said yes, Stewart asked what the price of the stock was. And then, she allegedly replied, “I want to sell all my shares.” She specified that they be sold at the market price and asked for an e-mail confirming the sale, according to Faneuil.Your money, fast.

That’s a direct contradiction of Stewart’s contention that she and Bacanovic had a standing sell order if the shares dropped below $60. Stewart is accused of lying to prosecutors and obstruction of justice in relation to the stock sale. Prosecutors also contend she committed securities fraud, trying to prop up the share price of her company, Martha Stewart Living, by declaring her innocence.

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david
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Re: Witness: Stewart said ‘Sell all my shares’
« Reply #1 on: Feb 4^th, 2004, 8:03pm »

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I have yet to understand why Ms. Stewert is even fuighting this

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Rhune
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Re: Witness: Stewart said ‘Sell all my shares’
« Reply #2 on: Feb 4^th, 2004, 8:22pm »

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Because she doesn't want to creatively decorate a prison cell, and insider trading is quite illegal. Wink

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luci
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Re: Witness: Stewart said ‘Sell all my shares’
« Reply #3 on: Feb 5^th, 2004, 10:37am »

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Me? I've never liked her one bit, always have thought she is one big fake as for as truly caring about her public.

IF she is found guilty, she will most definitely have to stay in private seclusion or else.........................oh, I think it is called solitarity confinement! Anyway, you know what I mean!

Whether we like her or not, it is sad to end a successful career in this type of situation.
Goes to show what greed can do.

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MzWings
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Re: Witness: Stewart said ‘Sell all my shares’
« Reply #4 on: Feb 5^th, 2004, 4:16pm »

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on Feb 4^th, 2004, 8:22pm, Rhune wrote:

.......insider trading is quite illegal. Wink

Right - I understand that. But setting up in advance to sell shares in a stock when it reaches a particular $ mark - that's also inside trading?

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Addams
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Re: Witness: Stewart said ‘Sell all my shares’
« Reply #5 on: Feb 5^th, 2004, 4:48pm »

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Rhune I think it depends on the basis you make that decision.

Insider information means that you receive information from an insider and then act on it before others hear the same information (outsiders) and this gives you an advantage. That is wrong.

However, if you buy some stock one day and tell your broker to sell when it reaches a certain value. And you do this without any insider information, that is OK.

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MzWings
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Re: Witness: Stewart said ‘Sell all my shares’
« Reply #6 on: Feb 5^th, 2004, 4:56pm »

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Thanks for that info addams. So...then....she worked this out with her broker who knew when to hold'em, knew when to fold'em. And this wasn't "insider information"? But didn't someone tell MS broker the day before what was to become of this stock - that it was going to drop? Wouldn't that be insider info?

I know my opinion of MS is that of a wee population - but I really like MS and I've always admired her. Well...that being said....I'll just go over there....and hide.

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"Senility Prayer"...God grant me...
The senility to forget the people I never liked
The good fortune to run into the ones that I do
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Dixie
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Re: Witness: Stewart said ‘Sell all my shares’
« Reply #7 on: Feb 5^th, 2004, 7:01pm »

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Since I work for Merrill, I can tell you that the supposed agreement she had with her broker is BULLSHIT. If a client gives us an order to sell a security at a certain price, that order is entered on the computer and stays "in force" for 30 days, at which time, a written cancellation notice is sent to the client. It is called a STOP LOSS order, so that if a stock starts falling, your order will execute automatically and you won't lose more than you intended.

Merrill found no record of instructions to place a Stop order, either written, or on the computer. They were both fired immediatley for that and the lack of cooperation.

I have been in the position of Mr. Faniuel, and I can tell you that he was stupid, but also very young, (24 at the time this happend) and probably scared to death to disobey his boss, the broker Mr. Baconvic. Baconovic and Stewert thought they wouldn't be caught. And believe me, they knew EXACTLY what they were doing.

Martha was a Stockbroker before for God's sake!!!

What pisses me off most, is that I personally have to pay for these idiots, because our clients lose a little trust for us with each one of these assinine incidents. There are bad apples in every bunch, and they ruin it for honest, hardworking people.

:soapbox:

I'll step down now. :meditate:

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Rhune
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Re: Witness: Stewart said ‘Sell all my shares’
« Reply #8 on: Feb 6^th, 2004, 2:22pm »

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Very interesting, I'm glad you shared that with us. I hope that if Martha is found guilty she is not given some sweet little community service/probation crap. The people of Enron and ImClone and these other corrupt companies that lied on the books and did insider trading, etc. are just as responsible for hurting our overall economy as the Al Queda were. To have one come on top of the other was just devastating for our country and I don't think any of these people should be shown leniancy.

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Dixie
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Re: Witness: Stewart said ‘Sell all my shares’
« Reply #9 on: Feb 6^th, 2004, 4:44pm »

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Ditto that Rhune . Slowly but surely, these criminals are being rounded up and put in jail. Personally, If Martha had fessed up from the get go, she would have gotten a slap on the wrist and that would have been the end of it. I qould have been okay with that. Really, who among us would not panic and sell if we were told the stock would fall the next day.

The fact that she has copped this holier than thow attitude and continues to lie makes me hope she does some jail time. Wink

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luci
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Re: Witness: Stewart said ‘Sell all my shares’
« Reply #10 on: Feb 6^th, 2004, 8:44pm »

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The fact that she has copped this holier than thou attitude and continues to lie makes me hope she does some jail time.
***The above statement was posted by Dixie***

To me, this one statement is why so many folks are against her,
the holier than thou attitude she projects.

« Last Edit: Feb 6^th, 2004, 8:44pm by luci »

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Rhune
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Re: Witness: Stewart said ‘Sell all my shares’
« Reply #11 on: Feb 18^th, 2004, 7:26pm »

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Investigator Casts Doubt on Stewart Pact
Wed Feb 18, 5:16 PM ET Add Entertainment - Reuters to My Yahoo!

By Paul Thomasch and Gail Appleson

NEW YORK (Reuters) - A securities investigator testifying at Martha Stewart's obstruction of justice trial on Wednesday cast doubt on whether the trendsetter had a pre- existing order to sell shares in a biotech company if they fell to $60.

Stewart and her broker, Peter Bacanovic, are on trial for trying to hide the reason behind Stewart's Dec. 27, 2001 sale of ImClone Systems Inc. Prosecutors charge that Stewart sold her shares after receiving a secret tip that ImClone's founder was dumping his shares.

The two defendants maintain they agreed Stewart's ImClone shares would be sold if they hit $60. But a government witness on Wednesday said ImClone fell below that price at least three times in the fall of 2001 before Stewart traded.

Peter Melley, an investigator with the National Association of Securities Dealers, showed jurors charts tracking ImClone's price movement during 2001. The chart showed the price fell below $60 on Oct. 29 and 30 and again on Nov. 9.

Prosecutors charge that Bacanovic left a telephone message for Stewart on Dec. 27, 2001, warning her that ImClone would start trading downward. At the time, ImClone's stock price was about $61.53. According to the indictment, Stewart sold 3,928 shares later that day at an average price of $58.43 per share yielding proceeds of about $228,000.

In addition to charges that Bacanovic and Stewart lied to investigators looking into the trade, the trendsetter is also accused of securities fraud.

That charge, which carries a possible 10 year sentence, accuses Stewart of making false public statements to protect the financial health of her own company, Martha Stewart Living Omnimedia Inc..

Prosecutors say Stewart committed securities fraud because investors who bought Martha Stewart Living shares trusted that the company's founder and public face was telling the truth when she said she had no insider knowledge that prompted her to sell nearly 4,000 ImClone shares.

Stewart had made statements denying her ImClone trades were based on an illegal tip. The denials came as publicity swelled in June 2002 over a Congressional investigation into insider trading of ImClone shares.

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