NEW YORK -- Weeks before Martha Stewart sold her ImClone Systems stock, her stockbroker mentioned a desire to get rid of the shares before they fell to $60, a defense witness testified yesterday.
Lawyers for Stewart and broker Peter Bacanovic hope the testimony, by Stewart business manager Heidi DeLuca, undercuts the government's charge that the notion of selling ImClone at $60 was no more than a cover story.
DeLuca said she was handling the transfer of Stewart's shares from another bank to Bacanovic's bank, Merrill Lynch & Co., when he told her he could "set a floor price of $60 or $61" for those shares as a safeguard.
"He said he would speak to Martha about it personally," DeLuca said.
DeLuca placed the conversation on Nov. 8, 2001. Stewart sold all 3,928 of her ImClone shares on Dec. 27, 2001.
The government contends the sale happened because Bacanovic ordered his assistant to tip Stewart that ImClone founder Sam Waksal was dumping his shares that day.
Today, the defense hopes to use DeLuca to undermine the testimony of Douglas Faneuil, the Merrill Lynch assistant who was the star prosecution witness.
Faneuil testified DeLuca was angry with him in a January 2002 phone call because the ImClone sale, made at a gain to Stewart, disrupted Stewart's careful planning to sell some stocks at a loss for tax purposes.
DeLuca is expected to contradict that testimony today.
Faneuil has testified that he passed a tip from Bacanovic to Stewart on Dec. 27, 2001, that Waksal was unloading his ImClone shares. Stewart promptly sold hers.Faneuil first supported Bacanovic and Stewart, then changed his story in June 2002 in a cooperation deal with the government.