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CNN Live At Daybreak
Martha Stewart Trial: Star Prosecution Witness Set to Testify
Aired January 29, 2004 - 05:16 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: Testimony resumes in the Martha Stewart trial today. The government's star witness is set to take the stand. An assistant to Stewart's broker is expected to say he was ordered to pass illegal, insider information to Stewart.
CNN's Deborah Feyerick is covering Stewart's trial.
(BEGIN VIDEOTAPE)
DEBORAH FEYERICK, CNN CORRESPODENT (voice-over): Prosecutors say Martha Stewart and her broker, Peter Bakanovic, went to great lengths to lie. Martha Stewart, in order to protect her stake in her company, worth hundreds of millions of dollars. Bakanovic in order to keep his broker's license and high-paying job.
But defense lawyers lay out a very different picture. They explain that Stewart and her broker sold 4,000 shares of ImClone stock as part of a year-end tax plan. That is, they were figuring out how to offset capital gains on a $45 million windfall. To do this, they were selling losing stocks, or stocks they didn't like. ImClone was one of them, along with Apple and Nokia. Stewart sold all three the same week, Christmas 2002.
What's more, her lawyer says Stewart's broker recommended getting rid of ImClone months earlier, and that in October Stewart sold 50,000 shares of it from her company's pension. The price? Sixty-one dollars, close to the price that later triggered the more controversial ImClone sale in December.
Prosecutors say they'll show Stewart and Bakanovic never had a tax law-selling plan. Their star witness, Merrill Lynch assistant broker Doug Fanueil. Prosecutors say Fanueil will testify Stewart sold after he told her ImClone's CEO Sam Waksal was dumping seven million shares of his biotech stock. Defense lawyers plan to attack Fanueil's credibility, portraying Fanueil as starstruck by Martha Stewart, and saying he was overwhelmed that morning by 75 phone calls, most between Sam Waksal and his family, who were busy unloading stock.
Deborah Feyerick, CNN, New York.
(END VIDEOTAPE)
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Testify>
Aired January 29, 2004 - 05:16 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: Testimony resumes in the Martha Stewart trial today. The government's star witness is set to take the stand. An assistant to Stewart's broker is expected to say he was ordered to pass illegal, insider information to Stewart.
CNN's Deborah Feyerick is covering Stewart's trial.
(BEGIN VIDEOTAPE)
DEBORAH FEYERICK, CNN CORRESPODENT (voice-over): Prosecutors say Martha Stewart and her broker, Peter Bakanovic, went to great lengths to lie. Martha Stewart, in order to protect her stake in her company, worth hundreds of millions of dollars. Bakanovic in order to keep his broker's license and high-paying job.
But defense lawyers lay out a very different picture. They explain that Stewart and her broker sold 4,000 shares of ImClone stock as part of a year-end tax plan. That is, they were figuring out how to offset capital gains on a $45 million windfall. To do this, they were selling losing stocks, or stocks they didn't like. ImClone was one of them, along with Apple and Nokia. Stewart sold all three the same week, Christmas 2002.
What's more, her lawyer says Stewart's broker recommended getting rid of ImClone months earlier, and that in October Stewart sold 50,000 shares of it from her company's pension. The price? Sixty-one dollars, close to the price that later triggered the more controversial ImClone sale in December.
Prosecutors say they'll show Stewart and Bakanovic never had a tax law-selling plan. Their star witness, Merrill Lynch assistant broker Doug Fanueil. Prosecutors say Fanueil will testify Stewart sold after he told her ImClone's CEO Sam Waksal was dumping seven million shares of his biotech stock. Defense lawyers plan to attack Fanueil's credibility, portraying Fanueil as starstruck by Martha Stewart, and saying he was overwhelmed that morning by 75 phone calls, most between Sam Waksal and his family, who were busy unloading stock.
Deborah Feyerick, CNN, New York.
(END VIDEOTAPE)
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Testify>
