- The Washington Times - Wednesday, February 11, 2004

NEW YORK (AP) — Jurors in the Martha Stewart trial listened for more than an hour yesterday to a recording in which her stockbroker recounts to investigators his version of why the lifestyle entrepreneur sold ImClone Systems stock.

Jurors donned wireless headphones to listen to the interview of broker Peter Bacanovic by the Securities and Exchange Commission on Feb. 13, 2002.

On the tape, Mr. Bacanovic denies any advance knowledge of the news that sent ImClone plummeting just after Mrs. Stewart sold on Dec. 27, 2001.

He describes a conversation a week before the sale in which he asked Mrs. Stewart: “How low does this have to go before you’re prepared to part with it?” He said Mrs. Stewart didn’t know, so he suggested $60 per share.

The prosecution, which introduced the tape, contends the $60 story is a lie. Mr. Bacanovic’s assistant testified earlier that the broker ordered him to alert Mrs. Stewart on the day of the sale that the family of ImClone chief executive officer Sam Waksal was selling.

Earlier yesterday, Mrs. Stewart’s attorney, Robert Morvillo, tried to show that SEC enforcement lawyer Helene Glotzer gave biased testimony because she has a rooting interest for the government.

Mr. Morvillo also tried to draw out details of Miss Glotzer’s close work with the federal prosecutors handling the case. The SEC, prosecutors and the FBI routinely conduct joint white-collar investigations.

“Is it your hope that the government wins this case?” Mr. Morvillo asked.

“Yes,” Miss Glotzer said. “I believe in the case.” But she stressed she was a “fact witness” with no bias in her testimony.

Prosecutors have placed Miss Glotzer on the stand in the hope of illustrating what they say are repeated lies by Mrs. Stewart in 2002 about why she sold the 3,928 shares of ImClone stock.

Mrs. Stewart told the SEC in 2002 that she did not remember being tipped that Mr. Waksal was trying to dump his shares on the same day that she did, according to Mrs. Glotzer’s testimony.

Mrs. Stewart also said in two SEC interviews that Mr. Bacanovic handled her sale of ImClone that day. It was actually Mr. Bacanovic’s assistant, Douglas Faneuil, who took the order.

Under questioning from Mr. Morvillo, Miss Glotzer said the SEC had not provided Mrs. Stewart a form before a February 2002 interview that advises interviewees that lying to the agency is a crime.

But under questioning from prosecutor Michael Schachter, Miss Glotzer said SEC routinely does not provide the form when it conducts joint interviews with prosecutors. And she said Mrs. Stewart was clear on what the agency expected.

“She was advised to be truthful, and that she could speak to her counsel at any time,” Miss Glotzer said.

The day after Mrs. Stewart dumped ImClone, the company announced disappointing news about a cancer drug that sent the stock on a quick 18 percent decline. Mr. Waksal later admitted having advance knowledge of the news. He is now serving a prison sentence for his role.

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