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CNN Live At Daybreak
Key Witness for Prosecution in Martha Stewart Trial Takes Stand
Aired February 04, 2004 - 05:08 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: A key witness for the prosecution in the Martha Stewart trial takes the stand and admits he broke the law. The admission is at the heart of the government's case against Stewart. She's accused of lying to investigators and obstructing justice.
CNN's Allan Chernoff brings us up to date.
(BEGIN VIDEOTAPE)
ALLAN CHERNOFF, CNN CORRESPONDENT (voice-over): Damaging evidence yet against Martha Stewart from Douglas Faneuil, the soft- spoken former assistant to Stewart's stockbroker. On the stand, Faneuil recalled the frantic orders to sell ImClone's stock on December 27, 2001, by the family of ImClone's then chief executive, Sam Waksal. Waksal had his accountant call to have all his shares liquidated. His daughters, Aliza and Elana, also called to get out of the stock.
Faneuil said he called his boss, Peter Bacanovic, who was vacationing in Florida, to discuss Mr. Waksal's request. As the two were talking, Faneuil testified, suddenly Peter said, "Oh my god, get Martha on the phone."
But Stewart was traveling and couldn't be reached. Faneuil said Bacanovic then told him, "Listen, Martha is going to call and you've got to tell her what's going on."
"And from that, I took him to mean I had to tell her about the Waksal sales."
"Can I tell her about Sam? Am I allowed to?," Faneuil said he asked Bacanovic.
"Of course. You have to. That's the whole point. Make sure you get in touch with me about her sale," was Bacanovic's response, according to Faneuil.
Stewart and Bacanovic have claimed she sold because of a prior agreement to dump the stock if it fell below $60.
ROBERT HEIM, ATTORNEY: This is a very big day for the prosecutors. Douglas Faneuil really came through for them. He placed both Peter Bacanovic and Martha Stewart in the middle of very suspicious trading by Martha Stewart with respect to her ImClone shares. CHERNOFF (on camera): Faneuil's testimony is to resume Wednesday morning. He is expected to describe his conversation with Martha Stewart when he told her the Waksals were dumping their ImClone stock and her response to sell her shares in the company.
Allan Chernoff, CNN Financial News, 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
Stand>
Aired February 4, 2004 - 05:08 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: A key witness for the prosecution in the Martha Stewart trial takes the stand and admits he broke the law. The admission is at the heart of the government's case against Stewart. She's accused of lying to investigators and obstructing justice.
CNN's Allan Chernoff brings us up to date.
(BEGIN VIDEOTAPE)
ALLAN CHERNOFF, CNN CORRESPONDENT (voice-over): Damaging evidence yet against Martha Stewart from Douglas Faneuil, the soft- spoken former assistant to Stewart's stockbroker. On the stand, Faneuil recalled the frantic orders to sell ImClone's stock on December 27, 2001, by the family of ImClone's then chief executive, Sam Waksal. Waksal had his accountant call to have all his shares liquidated. His daughters, Aliza and Elana, also called to get out of the stock.
Faneuil said he called his boss, Peter Bacanovic, who was vacationing in Florida, to discuss Mr. Waksal's request. As the two were talking, Faneuil testified, suddenly Peter said, "Oh my god, get Martha on the phone."
But Stewart was traveling and couldn't be reached. Faneuil said Bacanovic then told him, "Listen, Martha is going to call and you've got to tell her what's going on."
"And from that, I took him to mean I had to tell her about the Waksal sales."
"Can I tell her about Sam? Am I allowed to?," Faneuil said he asked Bacanovic.
"Of course. You have to. That's the whole point. Make sure you get in touch with me about her sale," was Bacanovic's response, according to Faneuil.
Stewart and Bacanovic have claimed she sold because of a prior agreement to dump the stock if it fell below $60.
ROBERT HEIM, ATTORNEY: This is a very big day for the prosecutors. Douglas Faneuil really came through for them. He placed both Peter Bacanovic and Martha Stewart in the middle of very suspicious trading by Martha Stewart with respect to her ImClone shares. CHERNOFF (on camera): Faneuil's testimony is to resume Wednesday morning. He is expected to describe his conversation with Martha Stewart when he told her the Waksals were dumping their ImClone stock and her response to sell her shares in the company.
Allan Chernoff, CNN Financial News, 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
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