Merrill Document May Save Martha

Merrill unearthed a note, believed to have been written by Ms Stewart's broker, Peter Bacanovic, which seems to indicate that she had, as she as claimed all along, placed a stop loss order to sell ImClone shares once they fell to $60. There is, however, no way to confirm exactly when the note was written.

Stewart has been accused of insider dealing as she sold 4,000 ImClone shares in December, just one day prior to the US Food and Drug Adminisration's confirmation that it would not be licensing the company's so-called cancer 'wonder-drug'. Shares in the company slumped following the announcement.

Stewart has always protested her innocence and claimed that her sale of shares was just a coincidence. She is known to be a friend, however, of former ImClone founder and chief executive, Samuel Waksal. Waksal has recently been charged with insider dealing as it is claimed that he alerted family and friends, who sold around $10m in ImClone stock prior to the US government announcement.

Bacanovic, broker to both Stewart and Waksal, was recently placed on paid leave by Merrill.