Updated from 4:20 p.m. EST
Douglas Faneuil, the young broker's assistant at the center of the Martha Stewart trial, was fixated on the famous client and determined in the end to strike back at her, according to testimony Thursday.
David Apfel, the defense lawyer representing Peter Bacanovic, Stewart's stockbroker, focused much of his cross-examination on an attempt to show that the 28-year-old former
assistant had a combative relationship with the domestic entrepreneur. The lawyer forced Faneuil to acknowledge a series of emails showing that Stewart was a rude and even abusive client, but that Faneuil would have the last word.
Apfel introduced an email that Faneuil wrote to his friend Rob Haskell on Oct. 26, 2001, saying, "P.S.: Martha yelled at me again today, but I snapped in her face, and she actually backed down! Baby put Miss Martha in her place."
Faneuil told prosecutors he conveyed to Stewart a perfectly timed stock tip in December 2001 at the behest of Bacanovic, his boss. Apfel tried to show the young clerk had other motives for besmirching Stewart's name.
Another email that Faneuil wrote on Oct. 23, 2001, to his friend Margaret Denver said, "I just spoke to Martha! I have never ever been treated more rudely by a stranger on the telephone. She actually hung up on me! And she had the nerve -- the
-- to mention the layoffs in her anger." The email continued, "She sounded like a lion roaring under water."
Stewart and Bacanovic are on trial for obstruction of justice and other crimes in federal court in Manhattan. They are alleged to have lied about why Stewart sold nearly 4,000 shares of
days before a regulatory setback sent the shares tumbling.
Some of Apfel's cross-examination of Faneuil suggested that Stewart was petty. The witness relayed an instance in which Stewart was put on hold after calling her broker, Bacanovic. "She said she was going to leave Peter Bacanovic and leave Merrill Lynch unless the hold-music was changed."
It remains to be seen if the jury was moved by this line of defense by Apfel, who tried the judge's patience on many occasions. But it was clear on Thursday that it rankled Stewart's lawyer, who asked the judge for a side conference on the grounds that his client was unfairly tarnished.
After the meeting, Apfel showed the jury the confirmation of the infamous ImClone trade that Faneuil sent to Martha Stewart's personal email address.
At the end of the message Faneuil wrote, "Feel free to call me with any questions at Peter's number." Apfel said the email showed Faneuil's attempts to "promote himself with Bacanovic's clients."
Earlier in the day, Faneuil testified that the Merrill Lynch office that handled Stewart's business turned "schizophrenic" in the months following the ImClone trade, as conscience slowly got the better of Faneuil.
Faneuil said the gravity of Stewart's improbably lucky stock sale took time to sink in.
"It was a very long road to get to the point where I could see things clearly as they were," Faneuil testified. "It was a long process."
Even as his third day of testimony wore on, Faneuil was composed and collected under tough questioning by Apfel, who peppered him with questions about the events following Stewart's Dec. 27, 2001, sale of about 4,000 ImClone shares. Apfel spent the morning trying to depict the prosecution's star witness as a young man ambivalent about which authority he owed allegiance to -- his boss or the law.
"I felt I would be fired if I didn't lie," he testified, latter adding, "Peter made it very clear to me that I was not to discuss the events of December 27 with him or anyone as I knew them to have occurred."
It took about six months before Faneuil approached prosecutors with his story: that he believed himself caught in a conspiracy between Bacanovic and one of the country's most famous women to cover up the suspiciously timed trade. Part of the reason, he implied, was that he assumed a deal was in place between Merrill and the government to look the other way on Stewart in order to prosecute Sam Waksal, the ImClone founder whose frantic selling ignited the scandal.
"Didn't you think it was bizarre that Merrill would have a deal with the government saying 'Look the other way with Stewart'?" Apfel asked.
"I didn't understand how these things worked," Faneuil responded, adding that his lawyer at the time, Jeremiah Gutman, "told me to lay low."
And if he were so intimidated by Stewart's sale and his boss's alleged cover-up, how did he explain the high spirits evident in his relationship with Bacanovic in the months before he cut a plea deal with prosecutors?
"I wasn't physically afraid of Peter until I came forward," Faneuil said. Before that, "I compartmentalized my professional duties as Peter's assistant."
Apfel produced emails in which Faneuil appeared to be on good personal terms with Bacanovic. "Feel free to call me," read one. "But not too early. Hee hee hee."
Judge Miriam Goldman Cedarbaum disallowed as evidence a pornographic email allegedly sent to Bacanovic by Faneuil with the notation "I couldn't resist."
Asked about all the bonhomie, Faneuil said: "I tried to maintain the relationship. The office had turned schizophrenic."
Apfel must walk a fine line in trying to show that his client never ordered Faneuil to lie. Part of the prosecution's case rests on evidence Faneuil received gifts and special treatment from Merrill as the alleged cover-up unfolded. Apfel acknowledged the gifts in questioning Thursday, leaving it to the jury to decide whether they should be construed as an effort to silence the broker's assistant.
Asked about a plane ticket to Argentina he received from Bacanovic, Faneuil testified, "He said he was giving it to me because I was doing a good job." He was given an extra week off by Merrill office manager Judy Monahan. "I'm not going to infer why," Faneuil said. And a $150 dinner Monahan bought him in Manhattan? "She said I looked stressed," he said.
Implying ambition had a greater role in Faneuil's life than conscience, Apfel wondered why Faneuil left a higher-paying job to go work for Merrill in the first place. "I had asked for more responsibilities than I had," Faneuil said. "I was hungry to have a new experience in investment banking."