Martha Stewart falls victim to NYKs woes

[MavKikiNYC]

Just heard that the Merrill Lynch broker's assistant who's ratting out MattyStu was offered NYKs tickets if he'd keep quiet.

HA!

No wonder he talked.

Merrill Assistant Pleads Guilty in Martha Stewart Inquiry
By THE ASSOCIATED PRESS


Filed at 12:19 p.m. ET


NEW YORK (AP) -- An assistant to Martha Stewart's stockbroker pleaded guilty Wednesday to a misdemeanor charge that he was paid off to keep secret what he knew about inside information allegedly given to Stewart about ImClone Systems Inc.

Douglas Faneuil pleaded guilty as part of a deal to testify against Stewart and others who allegedly sold shares of ImClone last December -- just before the stock price began to plunge on news the Food and Drug Administration would not review its highly touted cancer drug, Erbitux.

In court, Faneuil said that during his interviews with law enforcement officials, ``I did not truthfully reveal everything I knew about the actions of my immediate supervisor and the true reasons for the `tippee's' sales.''

Merrill Lynch, where Faneuil worked, handled Stewart's sale of nearly 4,000 ImClone shares.

Faneuil reportedly had accepted Knicks tickets in exchange for hiding his knowledge from investigators of the alleged insider stock deal involving Stewart. Court papers said he received an extra week of vacation and a free airline ticket.

Stewart's name did not appear in the criminal information filed Wednesday before the magistrate in Manhattan federal court.

Prosecutors are trying to determine if Stewart was tipped off by her friend Sam Waksal, ImClone's founder and ex-CEO, or her Merrill Lynch broker, Peter Bacanovic, who was Faneuil's boss.

In the court papers, prosecutors said the tip, either directly or indirectly, came from Bacanovic.

Court papers also said that Bacanovic on Dec. 27 told a client, referred to in the papers as the ``tippee,'' that Waksal was trying to sell all of the ImClone stock that he held at Merrill Lynch.

``The tippee then sold all of the tippee's shares of ImClone stock, approximately 3,928 shares, yielding proceeds of approximately $228,000,'' the court papers said.

Waksal was indicted in August for allegedly tipping off family members to dump millions of dollars worth of ImClone stock before the bad news about Erbitux hit the markets. He pleaded innocent to the charges.

Stewart, who has previously denied any wrongdoing, has said she had a standing order with Bacanovic 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.

Stewart spoke by phone with Faneuil the day her sale was made, investigators say.

Faneuil pleaded guilty to receiving money or other valuables ``as consideration for not informing.'' The misdemeanor charge carries a maximum penalty of a year in prison, but under the plea deal, Faneuil likely will get probation.

Faneuil's cooperation increases the pressure on Bacanovic to tell everything he knows about any insider information that spurred sudden stock sales by members of Waksal's family and others, including Stewart.

[Drbio]

so does he get to keep the tickets?

That's worse than jail.

[David]

I think it should have read that they MADE him take the tickets or they were going to rat him out.

[MavKikiNYC]

His punishment will be season tickets.

[Drbio]

There was a drawing in NY recently. The winner received 2 season tickets to the Knicks. Second place had to take 8 season tickets.[img]i/expressions/face-icon-small-happy.gif[/img]

[David]

<< There was a drawing in NY recently. The winner received 2 season tickets to the Knicks. Second place had to take 8 season tickets.[img]i/expressions/face-icon-small-happy.gif[/img] >>



That's CAPITAL punishment.

[Smiles]

it's really sad that this guy got caught up in doing business in such a way... he's so young, and he has sooo screwed things up. i cannot imagine he'll get another decent position in this line of work ever again.

[MavKikiNYC]

Guess it could depend on whom all else he 'advised'...