Merrill Lynch Assistant May Testify Against Martha
New York, NY, Sept. 27—An assistant at Merrill Lynch has agreed to plead guilty to a misdemeanor and testify against Martha Stewart and others in the federal investigation of stock sales in ImClone Systems last year.
Prosecutors had sought to charge the assistant, Douglas Faneuil, with a felony for making false statements to investigators, but later agreed to a misdemeanor in exchange for his cooperation. The charge is expected to be filed within a few days.
Through his lawyer, Faneuil declined to comment, as did the U.S. attorney''s office in New York. A spokesperson for Stewart also declined to comment.
Merrill Lynch handled Stewart''s sale of nearly 4,000 ImClone shares in late December, shortly before the company announced that federal regulators would not review the company''s cancer drug, Erbitux.
Stewart has said she had a standing order with her broker, Peter Bacanovic—for whom Faneuil worked—to sell the ImClone shares if they fell below $60. Faneuil, 26, initially gave investigators the same account, but later changed his story and said there had been no such order.
The misdemeanor charge involves a gift Faneuil accepted from Bacanovic, in exchange for corroborating the account about the stop-loss order to the federal investigators.
