Deluca testifies that as of late October 2001, Stewart had 51,800 ImClone shares in her Merrill Lynch pension account, and 5000 ImClone shares in her Morgan Stanley personal account. Heidi insists that on November 8, 2001, she spoke with Peter Bacanovic on the phone about the ImClone stock Martha held in her personal account at Morgan Stanley. Deluca testifies that although Peter thought ImClone "was a dog," he said he'd talk to Martha about setting a floor price at $60 or $61—"when her Morgan Stanley shares arrived at Merrill Lynch."
Schachter: "About Ms. Stewart's pension account—tell us again how many ImClone shares she had there?"
"51,800."
"When were those sold, and for how much?"
"In late October 2001, for around $61," Heidi recalls.
"Isn't is possible, Ms. Deluca, that the Nov 8 conversation you remember actually took place on October 24, '01, the day before Ms. Stewart sold the stock in her pension account? Didn't the $60 conversation you had with Peter refer to her pension plan and not her personal account?"
She blinks, this time thinking. "Will you repeat the question?" she asks, a request she'll make of Schachter more than once. And not because he's being unclear. Quite the opposite. He's polite, considerate, and almost humble throughout his cross. No one objects, no one stirs.
"No. I had several conversations with Peter about ImClone. The one in October was about the pension plan; the one in November was about Martha's personal account," she insists.
"And how are you so certain, Ms. Deluca?"
"I know we spoke about the $60 or $61 floor on November 8 because I'd checked on the price the day before—I was regularly checking up on ImClone's price—to see if it had gotten closer to the tender offer. I recorded the price at $61.52 on November 7 and asked Peter about it the next day. He said he'd speak to Martha personally."
"Did you talk to Stewart about the $60 floor? Did you follow up with her regarding ImClone's stock price? Did you ever warn her when the price hit $60 and then dipped below as it did several times between November 8-12?" Schachter asks.
"No, it was taken out of my hands at that point [i.e., after her November 8 conversation with Peter]. Peter said he'd take it up with Martha."
Unfortunately for the defense, Schachter enters into evidence Heidi's message log. On a note dated October 25, 01, 2001, the day the pension shares were sold at $61, Heidi writes: "I know Martha wants me to stay out of it, but I wanted to remind her one last time of the 5000 ImClone shares in her Morgan Stanley account. Now it's out of my hands." This admission makes Heidi look perilously confused. Basically, she claims haphazardly that events which occurred on October 25 actually took place on November 8, and further muddles matters by attributing dates and conversations to activity in Martha's personal account when they can more logically be connected to her pension account. As we'll continue to see.
Schachter remains patient and focused as he simmers the defense witness. He asks about Martha's MSLO stock sale on October 24, 01, insinuating that Deluca spoke to Bacanovic on the phone on October 24, '01, at 2:19 p.m. for 21 minutes, about Martha's tax-loss selling plan, about which stocks to sell at a loss to offset her MSLO gains. He enters into evidence the Quicken worksheet on which Heidi noted Peter's suggestions, as well as the e-mail Deluca sent Stewart October 25, 2001, the following day, filling her in on Bacanovic's suggestions.
On a document also dated October 24, 2001, a document listing the same stock with the same prices as the e-mail Heidi sent Martha on October 25, Heidi scrawls at the bottom, "Wednesday. Im-Clone: $61.52. Tender offer not responding." This is the note Heidi claims to have written on November 8, 2001. But once again, the document is dated October 24, not November 8. It's baffling how defense missed this, and more baffling that no one asks Heidi why on November 8 she wrote such a note on a seemingly unrelated document, one dated two weeks prior to her claim. There are feasible explanations—mine would be complete guesses—but the fact that defense doesn't take this one on isn't a good sign. Schachter does: he believes Deluca's note was referencing a tender offer Bristol Meyers made on September 28, 2001, a bid to buy 20 percent of ImClone shares @ $70. By "tender offer not responding," Heidi—the prosecution contends—must have been comparing the $61.52 price she recorded off NASDAQ to the $70 Bristol Meyers was offering.
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