E-mails portray Martha Stewart as rude, angry toward Merrill Lynch assistant
After one encounter, the assistant e-mailed a friend that he had just talked to Stewart and "I have never, ever been treated more rudely by a stranger on the telephone. She actually hung up on me!" He also noted Stewart had referred to "people like that idiot" who answered the phones — Faneuil's job — as the reason why Merrill Lynch "is laying off 10,000 employees."
Faneuil is the government's star witness against Stewart, 62, and Merrill Lynch broker Peter Bacanovic, 41, who are charged with conspiracy, obstruction of justice and lying to the Securities and Exchange Commission about her Dec. 27, 2001, sale of 3,928 shares of ImClone Systems stock. The company announced the next day that its top drug had been dealt a regulatory setback.
Lawyers for Bacanovic and Stewart say the two had arranged to sell the stock if the price dropped below $60 a share, as it did the day of the sale.
But Faneuil testified Stewart sold her shares after he told her — on his boss Bacanovic's instruction — that ImClone founder Samuel Waksal was trying to dump all his shares in the company.
Faneuil, 28, has been on the stand since Tuesday. Bacanovic's lawyer David Apfel scored his strongest points against the broker's assistant yesterday by introducing evidence about Faneuil's previous interactions with Stewart.
But the e-mails and testimony also portrayed Stewart in an unflattering light and could backfire by making the 12 jurors and six alternates sympathize with Faneuil, outside lawyers said.
Faneuil acknowledged he had several run-ins with Stewart.
He said Stewart once accused him of failing to be properly registered as broker after they had a misunderstanding about how much a stock's price had changed. He also e-mailed a friend in October, "Martha yelled at me again, but I snapped in her face and she actually backed down! Baby put Ms. Martha in her place!!!"
Shown copies of the e-mails in court yesterday, Faneuil said: "I believe I wrote those words exactly."
Three days later, he wrote an e-mail that described Stewart complaining about the "idiot" who answered Bacanovic's phones. "(S)he made the most ridiculous sound I've heard coming from adult in quite some time, kind of like a lion roaring underwater," Faneuil wrote two months before the transactions that are at the heart of the trial.
Stewart also once threatened to take her business away from Merrill and Bacanovic "unless the hold music was changed," according to Faneuil. Merrill Lynch's midtown Manhattan office plays classical music on its phones for clients put on hold, officials there said.
Stewart, who wore black as she has for every day of Faneuil's testimony, sat stolidly throughout the questioning, even when the courtroom crowd tittered at the description of her "roaring." Bacanovic, in a blue suit, also spent much of the day looking straight ahead.
Faneuil stayed calm and largely composed during a full day of hostile questioning, although he looked tired by day's end.
His key testimony about his conversations with Stewart and Bacanovic on Dec. 27 has remained largely intact through more than seven hours of cross-examination, although he did acknowledge his recollection has changed on some of the surrounding details — the exact time that Waksal's two daughters called that day to talk about dumping their stock, and whether Waksal's accountant or his daughters called first.
Apfel focused on what Bacanovic did during the six months he and Faneuil were allegedly "covering up" the reason for the ImClone sale.
Faneuil acknowledged several times that Bacanovic never explicitly told him to lie and never specifically linked his offer of an extra week of vacation and plane tickets, about which Faneuil had testified previously, to the ImClone investigation.
He also conceded no one overheard the 10 to 20 conversations he says he had with Bacanovic about the Stewart situation in the six months between the trade and Faneuil's decision to change his story about the ImClone transaction.
Apfel also pointed out Faneuil did not come forward until after he saw media reports that Congress was investigating Stewart and Waksal.
But the former assistant, who now works in an art gallery, has remained firm in his contention that he felt pressure from Bacanovic to lie, and that the plane ticket and vacation offers were "rewards" for his silence.
"I felt I would be fired if I didn't lie," Faneuil said.
Merrill Lynch put him on leave after he came forward in June 2002 and told authorities he had tipped Stewart to Waksal's sales. He was fired when he pleaded guilty in October 2002 to accepting "consideration for failing to tell the government about a crime."
Apfel's repeated efforts to hammer at Faneuil's version of events have drawn occasional irritated comments from U.S. District Judge Miriam Cedarbaum. "We are now repeating what I have ruled is repetitive. Please move on," she said at one point.
Stewart's attorney, Robert Morvillo, will get his turn to cross-examine Faneuil on Monday when the trial resumes.
Material from The Associated Press is used in this report.