News Article

Mariana Trench

Pal says Martha admitted she had inside info. Friend and neighbor Mariana Pasternak testifies that Stewart told her she knew the Waksals had been dumping ImClone stock before she sold her shares

Mariana Pasternak testified for only 20 minutes at friend and neighbor Martha Stewart's trial on Thursday, but that may have been enough time to confirm for the jury the prosecution's case against the homemaking mogul. Pasternak, who accompanied Stewart on her Mexican vacation in December 2001 -- during which Stewart's controversial sale of her ImClone stock took place -- testified that Stewart told her during the trip that she was aware that ImClone CEO Sam Waksal had been trying to unload his family's shares. ''Isn't it nice to have brokers who tell you those things,'' Pasternak quoted Stewart as saying, thus implicating broker and Stewart co-defendant Peter Bacanovic as well.

Stewart isn't being charged with insider trading but with obstruction of justice for allegedly lying to investigators about receiving the inside tip, which prosecutors say led Stewart to sell her stock a day before the share price plunged on news that the government would reject ImClone's new cancer drug. Three months after the sale, according to the Associated Press, Stewart told investigators she did not recall being told about her pal Waksal's stock dump. She and Bacanovic have maintained that she had given him a standing order to sell if the share price dropped below $60. But prosecution expert witnesses have testified this week that the ImClone price fell below $60 three times in late 2001 before Stewart's sale, and that the notation ''@60'' on Bacanovic's note to himself was written in different ink from most of the note.

The prosecution is expected to rest its case on Friday. Defense attorney Robert Morvillo told Reuters he's not sure whether Stewart will take the stand in her own defense.

Originally posted Feb 20, 2004