MARTHA STEWART TRIAL Secretary breaks down while giving testimony
The prosecution's star witness had earlier left the witness stand.
NEW YORK (AP) -- In an abrupt collision of Martha Stewart's cooking expertise and her criminal stock-fraud trial, a secretary burst into tears on the witness stand while describing a gift of plum pudding from the homemaking mogul.
Ann Armstrong, Stewart's secretary for six years, broke down while describing a phone conversation with Stewart on Dec. 27, 2001, the day she made her well-timed sale of ImClone Systems stock.
Stewart was calling from Texas during a refueling stop on her way to a vacation in Mexico. Armstrong said the two first chatted about the holidays.
"I thanked her for the plum pudding she sent home," the secretary said -- then began crying. Armstrong tried to continue, but the judge ended the trial 15 minutes early for the day.
Stewart herself appeared to take a deep breath, blowing her nose on a tissue and taking sips from a bottle of water.
Stockbroker's message
Another of the messages Armstrong gave Stewart that day had been left by her stockbroker: "Peter Bacanovic thinks ImClone is going to start trading downward."
The government claims Bacanovic was trying to get word to Stewart that ImClone founder Sam Waksal was dumping his shares. Stewart and Bacanovic say they had a pre-existing deal to sell ImClone when it fell to $60 per share.
Prosecutors, trying to undercut that theory, introduced two message logs that showed Bacanovic sometimes called Stewart to tell her the exact ImClone stock price. But Armstrong said Bacanovic left no such information on Dec. 27.
Just hours later, Stewart called Bacanovic's assistant and sold her 3,928 shares in the company -- avoiding a steep drop in the stock price when the company announced negative news the next day.
Faneuil's testimony
Prosecutors called Armstrong to testify after the government's star witness -- former Merrill Lynch & amp; Co. assistant Douglas Faneuil, who handled the ImClone sale -- finished his testimony after four days on the stand.
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.
On Monday, under questioning from Stewart lawyer Robert Morvillo, Faneuil said he did not believe he was doing anything wrong when he passed her the tip about the Waksal sale.
Faneuil also testified Stewart never encouraged him to lie.
Faneuil was asked by Morvillo whether he knew he was violating Merrill policy by relaying the tip. The company forbids its employees to give information about one client's account to another client.
But Faneuil said he only thought about the violation later, and he repeated that Stewart's broker at the time, Bacanovic, had ordered him to give Stewart the tip and encouraged him to lie about it later.
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