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Merrill Lynch


brokerage assistant reportedly will claim he lied to help his boss mislead investigators about Martha Stewart's trading in

ImClone Systems



In return for pleading guilty to the misdemeanor offense, the assistant, Douglas Faneuil, will provide testimony in the government's probe of Stewart, head of

Martha Stewart Living Omnimedia

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, and others in the ImClone trading scandal,

The Wall Street Journal


Faneuil initially backed up Merrill broker Peter Bacanovic's story that Stewart had a standing stop-loss order on her roughly 4,000 ImClone shares and automatically sold them when they fell below $60 each. According to the


, however, he is now planning to enter a plea in which he claims to have lied about that arrangement in exchange for a gift from Bacanovic.

Investigators are trying to determine if Stewart had inside information about an upcoming negative FDA ruling on ImClone's main cancer drug when she unloaded the shares in December. The home-style maven has repeatedly denied wrongdoing and according to the story, no charges against her are imminent.

Sam Waksal, the ImClone founder and friend of Ms. Stewart, has pleaded innocent to federal insider-trading charges. Prosecutors say he tipped off relatives to sell ImClone shares before the company's Dec. 28 announcement that the Food and Drug Administration wouldn't review its anticancer drug, Erbitux.