NEW YORK (CNN/Money) - Under questioning from defense lawyer David Apfel, Martha Stewart's business manager backed up Stewart's and former broker Peter Bacanovic's story that they had an agreement to sell ImClone stock at $60.
Jeremiah Gutman, former lawyer for key prosecution witness Douglas Faneuil, describes his meeting with Faneuil, who appeared emotional.
Heidi Deluca said that in a November 8, 2001 conversation former broker Peter Bacanovic told her "felt he would set a floor price of $60 or $61 just in case the stock continued to fall, as a safeguard," and that he planned to talk to Stewart about it. This is the first testimony that has supported the explanation Stewart and Bacanovic gave for her sale of ImClone shares the day before the stock plummeted.
Deluca will continue testifying when court resumes on Tuesday.
The judge in the Martha Stewart trial reserved decision Monday on whether or not to dismiss at least some obstruction of justice and securities fraud charges against the home decor maven and her former stockbroker.
Judge Miriam Goldman Cedarbaum was expected to rule, perhaps later Monday, on the defense motions. She made the announcement after hearing oral arguments from defense and prosecution lawyers Monday morning, and reading the defense motions late Sunday night.
The judge told Stewart's lead attorney, Robert Morvillo, that the evidence presented by the government in the trial has not turned it into an insider trading case -- despite his efforts otherwise.
"I understand you want to make this an insider trading case," Cedarbaum told Morvillo. "The evidence does not make this an insider trading case."
She added: "If the government had opened the door by seeking to prove insider trading, you could walk through that door." But she said the government hadn't done that.
Chocolate pudding
Another celebrity joined the courtroom scene Monday afternoon -- comedian Bill Cosby sat in the front row of the spectators, telling reporters "I'm here for a friend. I brought a couple of boxes of chocolate Jell-O."
Stewart, the founder and former CEO of Martha Stewart Living Omnimedia (MSO: Research, Estimates), and former broker Peter Bacanovic are charged with lying to cover up the real reason she sold 3,928 shares of ImClone Systems only one day before the government refused to review the company's application for a new cancer drug, Erbitux.
Jeremiah Gutman, the original attorney for key prosecution witness Douglas Faneuil, testified that Fanueil mostly told the truth in his testimony earlier this month. But Gutman, called as a witness by attorneys for co-defendant Peter Bacanovic, said Faneuil had a tendency to embellish his comments.
His example was Faneuil's testimony that Gutman had mentioned a deal for the government to let the Stewart matter slide if Faneuil's employer, Merrill Lynch, delivered evidence to convict ImClone Systems founder Sam Waksal "on a silver platter." Gutman said his talks with a Merrill lawyer were less definitive.
Waksal, who was also a friend of Stewart, is serving a seven-year prison term after pleading guilty to charges of trying to sell ImClone stock a day before a negative announcement of FDA action on its key drug became public and sent shares tumbling. Faneuil has testified that Stewart told him to sell her ImClone stake after he revealed, at Bacanovic's behest, that Waksal was selling.
Gutman also testified that he told Faneuil to always tell the truth; Faneuil testified that Gutman said he should lay low while Merrill and the government were negotiating. And he said Faneuil was dramatic in describing his employers at Merrill, calling them "merciless, immoral people" and breaking down into tears.
Also testifying Monday was Dr. Albert Lyter, an ink expert, who said that three different types of ink were used on the worksheet that Bacanovic said showed Stewart had a $60 sell order on ImClone. The prosecution's expert had said that the $60 mark was the only one in different ink than the rest of the worksheet.
Stewart and Bacanovic have maintained the shares were sold due to a pre-existing arrangement between the two to sell if ImClone's share price fell to $60.
Martha may not testify
Depending on how Cedarbaum rules on dropping the charges, lawyers for Stewart and Bacanovic will take a minimalist defense strategy and are leaning against having their clients testify, according to sources close to the defense.
A spokesman for Stewart's team, George Saard, told CNNfn Monday that Stewart is more likely to testify if no charges are dropped and less likely to testify if some of the charges are dropped.
One of Bacanovic's attorneys, David Apfel, declined to confirm reports that his client won't testify, but said it remained a possibility.
If Stewart and Bacanovic do not take the stand, the jury may begin deliberations by the end of the week, CNNfn reported.
Stewart could face up to 30 years in prison while Bacanovic could be sentenced to 25 years if convicted on all counts, according to the U.S. Attorney's office.
The prosecution rested its case Friday after a close friend cast doubt on testimony damaging to Stewart and the judge heard dismissal arguments.
Jeremiah Gutman, former lawyer for key prosecution witness Douglas Faneuil, describes his meeting with Faneuil, who appeared emotional.
Heidi Deluca said that in a November 8, 2001 conversation former broker Peter Bacanovic told her "felt he would set a floor price of $60 or $61 just in case the stock continued to fall, as a safeguard," and that he planned to talk to Stewart about it. This is the first testimony that has supported the explanation Stewart and Bacanovic gave for her sale of ImClone shares the day before the stock plummeted.
Deluca will continue testifying when court resumes on Tuesday.
The judge in the Martha Stewart trial reserved decision Monday on whether or not to dismiss at least some obstruction of justice and securities fraud charges against the home decor maven and her former stockbroker.
Judge Miriam Goldman Cedarbaum was expected to rule, perhaps later Monday, on the defense motions. She made the announcement after hearing oral arguments from defense and prosecution lawyers Monday morning, and reading the defense motions late Sunday night.
The judge told Stewart's lead attorney, Robert Morvillo, that the evidence presented by the government in the trial has not turned it into an insider trading case -- despite his efforts otherwise.
"I understand you want to make this an insider trading case," Cedarbaum told Morvillo. "The evidence does not make this an insider trading case."
She added: "If the government had opened the door by seeking to prove insider trading, you could walk through that door." But she said the government hadn't done that.
Chocolate pudding
Another celebrity joined the courtroom scene Monday afternoon -- comedian Bill Cosby sat in the front row of the spectators, telling reporters "I'm here for a friend. I brought a couple of boxes of chocolate Jell-O."
Stewart, the founder and former CEO of Martha Stewart Living Omnimedia (MSO: Research, Estimates), and former broker Peter Bacanovic are charged with lying to cover up the real reason she sold 3,928 shares of ImClone Systems only one day before the government refused to review the company's application for a new cancer drug, Erbitux.
Jeremiah Gutman, the original attorney for key prosecution witness Douglas Faneuil, testified that Fanueil mostly told the truth in his testimony earlier this month. But Gutman, called as a witness by attorneys for co-defendant Peter Bacanovic, said Faneuil had a tendency to embellish his comments.
His example was Faneuil's testimony that Gutman had mentioned a deal for the government to let the Stewart matter slide if Faneuil's employer, Merrill Lynch, delivered evidence to convict ImClone Systems founder Sam Waksal "on a silver platter." Gutman said his talks with a Merrill lawyer were less definitive.
Waksal, who was also a friend of Stewart, is serving a seven-year prison term after pleading guilty to charges of trying to sell ImClone stock a day before a negative announcement of FDA action on its key drug became public and sent shares tumbling. Faneuil has testified that Stewart told him to sell her ImClone stake after he revealed, at Bacanovic's behest, that Waksal was selling.
Gutman also testified that he told Faneuil to always tell the truth; Faneuil testified that Gutman said he should lay low while Merrill and the government were negotiating. And he said Faneuil was dramatic in describing his employers at Merrill, calling them "merciless, immoral people" and breaking down into tears.
Also testifying Monday was Dr. Albert Lyter, an ink expert, who said that three different types of ink were used on the worksheet that Bacanovic said showed Stewart had a $60 sell order on ImClone. The prosecution's expert had said that the $60 mark was the only one in different ink than the rest of the worksheet.
Stewart and Bacanovic have maintained the shares were sold due to a pre-existing arrangement between the two to sell if ImClone's share price fell to $60.
Martha may not testify
Depending on how Cedarbaum rules on dropping the charges, lawyers for Stewart and Bacanovic will take a minimalist defense strategy and are leaning against having their clients testify, according to sources close to the defense.
A spokesman for Stewart's team, George Saard, told CNNfn Monday that Stewart is more likely to testify if no charges are dropped and less likely to testify if some of the charges are dropped.
One of Bacanovic's attorneys, David Apfel, declined to confirm reports that his client won't testify, but said it remained a possibility.
If Stewart and Bacanovic do not take the stand, the jury may begin deliberations by the end of the week, CNNfn reported.
Stewart could face up to 30 years in prison while Bacanovic could be sentenced to 25 years if convicted on all counts, according to the U.S. Attorney's office.
The prosecution rested its case Friday after a close friend cast doubt on testimony damaging to Stewart and the judge heard dismissal arguments.
