NEW YORK TRIAL Ex-Merrill Lynch worker: Stewart told me to sell

A broker had tried to reach Stewart but couldn't, the former employee testified.
NEW YORK (AP) -- In the most damaging testimony yet, a former Merrill Lynch assistant said today that Martha Stewart told him to sell her ImClone Systems stock after he advised her that the company founder was trying to dump his own shares.
Douglas Faneuil, under questioning from the prosecution, told the jury about a phone call he received from Stewart on Dec. 27, 2001. Faneuil said he told her that ImClone founder Sam Waksal was trying to sell all his shares of the stock -- and she ordered him to do the same.
"Hi, this is Martha," Stewart said to begin the conversation. Faneuil said he advised her that she "might want to act on the information that Sam's selling all of his shares."
"All of his shares?" Stewart replied, according to Faneuil.
"What he does have here, he's trying to sell," Faneuil testified that he answered. According to Faneuil, Stewart then told him to sell off all her shares at market price -- contradicting her story that there was a standing order to sell the stock when it hit $60 a share.
On Tuesday, Faneuil told jurors of a hectic morning at Merrill on Dec. 27, with Waksal's accountant and Waksal's two daughters barking sell orders at him in just the first hour of the day.
When Faneuil told broker Peter Bacanovic, on vacation in Florida, of the selling, Bacanovic tried to reach Stewart but could not, Faneuil testified. He said Bacanovic then told him to tell Stewart what was going on.
Clarification
Faneuil said he asked Bacanovic if that meant directly telling Stewart that the Waksals were selling their shares. He said the broker answered: "Of course. You must. You've got to. That's the whole point."
Prosecutors are hitching their case on Faneuil, just 28, hoping they will believe the tip led Stewart and Bacanovic to tell a string of lies to prosecutors about why Stewart sold the stock.
Bacanovic and Stewart say they had decided in the days before Dec. 27 to sell Stewart's 3,928 shares of ImClone when the stock fell to $60 per share. Stewart is also accused of deceiving her own investors about the investigation.
Waksal, a former jet-setting New York socialite, is serving a seven-year prison sentence after admitting he instructed his family to sell ImClone shares when he got word the government was about to reject ImClone's new cancer drug.