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"Yes." A stream. Perhaps she had a vision.
While Stewart's closest ally almost tossed her off the bridge, Douglas Faneuil's friends—the next two government witnesses—stuck to their stories. Zeva Bellel and Eden Warren could both be incarnations of the Madeline storybook figure. Raven-haired and reed-narrow, the respective Vassar and Yale students reek of blue blood with a complex. Zeva, who's lived in Paris for the last four years, is currently freelance writing; Eden describes herself as the "ex-director of a non-profit called Summersearch, an agency that looks after impoverished youth." No mention of what activity currently fills her days. Both were born and raised in Manhattan.
Zeva Bellel, twenty-nine, testifies first. She met Faneuil at Vassar in '96; their friendship blossomed in the following years. When she visited New York early on in 2002, the two spent most of their time at Rob Haskell's apartment (Faneuil's ultimate friend).
"On January fourth, Faneuil arrived home from work very upset," she testifies to prosecutor William Burke. "He said he'd been contacted by the SEC about a stock trade." She repeated what Faneuil told her using almost the precise wording we'd heard in his testimony—that on the morning of December 27, Sam Waksal and family bombarded him with calls, "dumping shares in a heated rush." He explained to Zeva that ImClone's wonder drug had not received the anticipated approval on December 27, and that its share price was expected to plummet.
"Doug said his boss told him to call Martha Stewart and tell her the Waksals were selling their shares. He said he knew it wasn't right to do that, so he paused and asked, 'Are you sure that's okay? Can I do that?' His boss said, 'It's not a matter of okay—just do it.'"
Zeva testifies that in their only other Bacanovic conversation, Faneuil mentioned approaching his boss "to elicit some direction or advice or support" after receiving a call from the SEC. "He asked Peter why the SEC was interested in Stewart's sale, but his boss cut him off. 'Listen, nothing happened, there's nothing wrong with the sale. This is how it happened, this is how it was and it's the truth.' Faneuil said he felt abandoned and betrayed; he knew Peter's story was totally inaccurate."
On cross, Bacanovic attorneyDavid Apfel fails to pin the charge of insider knowledge on Faneuil. "Did he tell you that he knew the FDA would reject ImClone's drug application during the time of the Waksal trades?"
"No. He was explaining why the Waksals were selling shares, just for my information." She's unnecessarily defensive: the jurors are hers. They watch Zeva intently, barely blinking, occasionally scribbling in their notebooks. Apfel asks the witness if she remembers her Aug '02 SEC testimony, during which she claimed that Faneuil told her that Bacanovic had tried reaching Martha himself first. That it was only after discovering she was airborne that Peter asked Faneuil to leave a message for her. She says no, she doesn't recall. "So are you testifying that your memory's better today than it was in Aug '02?" Apfel presses.
Eden Werring's testimony goes much the same way, but more quickly. She spoke to Faneuil while visiting Haskell in April '02. "He came in with Rob one afternoon and seemed very stressed. He said something had happened at work and he had to lie for his boss."
When prosecution's final witness is dismissed, Cedarbaum turns to the jury. "I'm dismissing you for a long lunch. You've all become good friends during the course of this trial," she says, laughing meaningfully. They laugh and nod enthusiastically. "I'll call you when I need you, but in any event, I'll not interrupt your lunch." God forbid.
She wouldn't get the chance anyway—Morvillo and prosecuting attorney Karen Seymour spend an hour and a half debating the legitimacy of the securities charge. Seymour contends that Stewart intentionally misled her investors repeatedly throughout the month of June, most flagrantly during a June 19 "investors meeting." Speaking of misleading, Seymour depicts the conference as an investors only event that Stewart put together herself to bolster her ailing stock price.
"This was not a meeting with People magazine. She assembled investors and actively lied to them about her $60 sell agreement," Seymour argues.
Morvillo's objections—that the June 19th meeting had been scheduled long before the bad press, that Stewart's statement was brief and merely a repetition of what she'd said in two previous press releases, that not to say anything when the public demanded it would also have depreciated the value of her shares—are on target, but incomplete. "As long as it was publicly disseminated that the SEC was investigating her sale, the price of Martha Stewart Living Omnimedia would continue to plummet," Morvillo asserts. Not to mention that what Seymour colors into Martha's stock-holder duping scheme was in fact a mid-year industry conference. It was attended by twenty or thirty other companies, a fact that Bear Stearns equity research analyst Kevin Gruneich. testified to yesterday.
Morvillo's arguments get shaky once he brings in hypotheticals. "The rumor investors really cared about was the Sam Waksal tip. So let's assume for a minute that Martha did lie about the $60 price agreement: A false statement that corroborates a true statement is immaterial." In other words, hypothetically, she responded truthfully with regard to the rumors; the $60 agreement was only a subsidiary (lie) designed to corroborate the truth—her denial of the receiving a tip from Waksal.