The secretary to Westport’s Martha Stewart broke down in tears on the witness stand today as she began to describe a phone conversation with Stewart on the day she sold her ImClone Systems stock.
The judge overseeing the trial ended the day’s proceedings 15 minutes early when secretary Ann Armstrong could not continue her testimony.
Armstrong was answering questions from a prosecutor about relaying a message to Stewart from her stockbroker on Dec. 27, 2001, that “ImClone is going to start trading downward.”
Armstrong said she first talked with Stewart who was checking in during a plane refueling on the way to a Mexican vacation ֖ about how each had spent the holiday season.
“I thanked her for the plum pudding she sent home,” Armstrong said through sobs. U.S. District Judge Miriam Goldman Cedarbaum called a five-minute recess, then adjourned the trial for the day.
At one point, the prosecutor asked Armstrong how she got in touch with Stewart by telephone.
That resulted in Armstrong’s reciting various telephone numbers for Stewart, including her personal cellphone number and the numbers for her home in Westport.
A spokesman for Stewart said later that the defendant would have to change all of her telephone numbers as a result, the New York Times reported.
“It was pure harassment with no motive,” said the spokesman, George Sard. “There was no need to introduce all those personal phone numbers.”
Stewart is accused of lying about why she sold her ImClone shares later that day. The government says she received a secret tip that ImClone founder Sam Waksal was selling his shares.
Earlier today, the government’s star witness against Stewart testified that he did not believe he was doing anything wrong when he passed her the tip that led her to sell ImClone stock.
Former brokerage aide Douglas Faneuil, who handled the stock sale, also testified Stewart never encouraged him to lie.
Faneuil was asked by Stewart lawyer Robert Morvillo whether he knew he was violating Merrill Lynch & Co. policy when he gave Stewart the tip that Waksal was trying to dump his shares in the company.
But Faneuil said he only thought about the violation afterward, and he repeated that Stewart’s broker at the time, Peter Bacanovic, had ordered him to give Stewart the tip and encouraged him to lie about it later.
“I would say because Peter told me to do it, I did not think I was doing anything wrong,” Faneuil said.
Stewart and Bacanovic are accused of repeatedly lying to investigators about why Stewart sold her 3,928 shares of ImClone. Stewart is also accused of deceiving investors in her own media company about the ImClone probe.
Faneuil has insisted that Bacanovic ordered him to tip Stewart about Waksal. He says he never knew of any pre-existing arrangement between Stewart and the broker to sell ImClone when it fell to $60, as they have asserted.
Faneuil told Morvillo today that he had had about a dozen sessions with federal prosecutors to prepare for his testimony, and he could not recall any questions from prosecutors at the trial that had surprised him.
