Witness details Stewart tirades

NEW YORK -- The star witness against Martha Stewart said yesterday that she had berated him at least twice and once threatened to take her business to another brokerage because she didn't like the telephone hold music.

Douglas Faneuil, who handled the questionable stock trade at the heart of Stewart's trial, confirmed he wrote e-mails to friends describing tirades by Stewart.

In one e-mail on Oct. 23, 2001, after handling a call from Stewart at Merrill Lynch & Co., Faneuil told a friend: "I have never, ever been treated more rudely by a stranger in my life. She actually hung up on me!"

Three days later, he wrote to another friend: "Martha yelled at me again today, but I snapped in her face and she actually backed down! Baby put Ms. Martha in her place!!!"

The e-mails emerged under questioning by a lawyer for Peter Bacanovic, Stewart's former stockbroker, who is accused of ordering Faneuil to give Stewart the tip that led her to dump all her ImClone Systems stock on Dec. 27, 2001.

Faneuil initially supported Stewart and Bacanovic's story that they had a deal to sell her ImClone shares at $60. Faneuil claims Bacanovic ordered him to tell Stewart the family of the ImClone founder was dumping its shares.

Lawyers for Bacanovic have described Faneuil as "fixated" on Stewart while he worked at the brokerage, and were using the e-mails to try to convince the jury he did not like Stewart and may have been out to get her.

Bacanovic lawyer David Apfel asked Faneuil whether it was true Stewart once said "something about how bad the hold music was. She told you she was going to leave Mr. Bacanovic and leave Merrill Lynch unless the hold music was changed."

Faneuil confirmed the account. Jurors broke up in laughter.

Earlier, Faneuil said he believed he would lose his job unless he lied to cover up the true reason Stewart sold. "I felt I would be fired if I didn't lie," Faneuil said. The remark came as Apfel apparently was trying to show that the payment plan Bacanovic arranged for Faneuil had no connection to Stewart's stock trade.

But when Faneuil answered instead that he believed his job was at risk, Apfel asked US District Judge Miriam Goldman Cedarbaum to strike the remark from the record. She did not.

Besides working with Bacanovic to obstruct justice, Stewart is accused of deceiving investors in her own company, Martha Stewart Living Omnimedia.

Faneuil has testified that Bacanovic ordered him on Dec. 27, 2001, to tip Stewart that ImClone founder Sam Waksal was trying to dump his shares in the company.

The young assistant has also testified that Bacanovic -- without explicitly asking him to lie -- repeatedly pressured him to back up his and Stewart's assertion. Apfel asked Faneuil whether Bacanovic had specifically asked him to lie. Faneuil said Bacanovic had not -- but "I understood what he was telling me."Robert Morvillo, Stewart's lead lawyer, was expected to begin his own cross-examination of Faneuil on Monday. The trial will be in recess today.