Prosecutors Want Merrill Man To Testify

10 years ago

The Wall Street Journal reports that investigators looking into Martha Stewart's stock trading are now hoping to persuade her Merrill Lynch broker, Peter Bacanovic, to testify as they probe whether she lied to federal investigators in connection with the sale of some of her shares in ImClone Systems Inc.

Bacanovic has previously said that Ms Stewart sold 4,000 shares in ImClone on December 27th because of a pre-arranged order to sell. The very next day the company announced that its so-called wonder drug would not be licensed by the US Food & Drug Administration and the shares bombed.

Samuel Waksal, former chief executive at ImClone, has now been charged with insider trading. He is accused of tipping off family and friends, who sold around $9m in shares prior to the drug announcement. Stewart is known to be a close friend of Waksal.

Bacanovic and his assistant, Douglas Faneuil, have been placed on paid 'administrative leave' by Merrill and Faneuil is believed to have conceded to the firm and federal regulators that Stewart had no prearranged order to sell ImClone shares in place for December 27th.

Prosecutors are now thought to be attempting to entice Bacanovic with the offer of a deal as long as he agrees to testify against Ms Stewart.

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