Martha Stewart's $60 Sell Story Hit Again

A transcript shows Peter Bacanovic denying he put a floor on ImClone shares.
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Updated from 11:59 a.m. EST

Prosecutors in Martha Stewart's criminal obstruction trial took another bite out of her story Wednesday, producing a transcript that showed Peter Bacanovic didn't remember urging a Stewart assistant to sell shares of

ImClone Systems

(IMCL)

when they fell below $60.

The evidence was presented during a rebuttal period that followed a decision by Stewart's defense team to rest their case, signaling they believe acquittal is likely without the domestic entrepreneur's testimony.

Bacanovic's lawyers rested their case earlier in the day. But in a final salvo against the former Merrill Lynch broker, prosecutors used Wednesday's late session to play the jury an interview between him and federal investigators conducted after Stewart's fortuitous ImClone divestiture on Dec. 27, 2001.

In the Feb. 13, 2002, interview, Bacanovic is asked about phone conversations he had with Stewart's business manager, Heidi DeLuca, in the weeks before Stewart's ImClone trade. Those discussions were the basis of testimony Monday and Tuesday, in which DeLuca backed Stewart's claim to have sold ImClone under an informal stop-loss agreement with Bacanovic that kicked in at $60.

But Bacanovic said no such discussion took place in the tape played Wednesday.

"Did you talk to Heidi at all about, you know, 'Martha Stewart told me that once the stock hits $60, I should sell?'" asked

Securities and Exchange Commission

investigator Helene Glotzer, according to the transcript.

"I don't get into that level of detail with Heidi," Bacanovic replied.

"So, the issue of the stock at $60 didn't come up with Heidi?" Glotzer asked.

"No," Bacanovic said.

The interview is at odds with the testimony of DeLuca, who not only said Bacanovic said ImClone should be sold at $60, but called the stock "a dog."

The transcript was the last piece of evidence presented to the jury, which now awaits closing arguments before beginning deliberations. Stewart's lawyer Robert Morvillo called just one witness Wednesday, a former lawyer with the high-profile law firm of Wachtell Lipton who accompanied Stewart in her initial interviews with FBI investigators.

Judge Miriam Goldman Cedarbaum, who has yet to rule on defense motions to throw out securities fraud charges, has indicated the case could go to the jury next week.

Shares of

Martha Stewart Living

(MSO)

, which have become lottery tickets on the trial's outcome, were recently up 26 cents, or 2%, to $13.36. Earlier Wednesday, they rose above $13.40 for a second straight day, their price when the trial began.

The shares went as low as $11.42 on Feb. 11, the day after Stewart's personal assistant testified that her boss retyped a phone message from Bacanovic about ImClone Systems' price.

Stewart and Bacanovic are being tried in federal court in Manhattan for allegedly concocting a story to explain away Stewart's perfectly timed sale of about 4,000 ImClone Systems shares on Dec. 27, 2001. Government lawyers say the sales occurred after Stewart received a tip at Bacanovic's behest that family members of ImClone founder Sam Waksal were trying to unload their shares through Bacanovic's office.

Stewart claims she had an informal agreement with Bacanovic to sell the stock if it went below $60, a claim that was backed up by testimony this week from her former business manager, Heidi DeLuca. DeLuca testified about a conversation in November 2001 in which Bacanovic called ImClone a "dog" that should be sold if it fell into the low $60s.

On Tuesday, government lawyers tried to cast doubt on that testimony, suggesting in a cross-examination that she couldn't clearly remember the facts surrounding the November 2001 phone call.

Part of DeLuca's testimony was that she had made a notation the day before Bacanovic's November phone call in which she listed ImClone's price as $61.52 -- just north of broker's supposed "floor" for the shares. But government lawyers pointed out, and DeLuca confirmed, that ImClone was also trading at $61.52 on Oct. 24 -- the day she had another phone conversation with Bacanovic in which they discussed strategies to reduce Stewart's tax burden.

Prosecutors hope jurors will conclude DeLuca conflated the two conversations and is misremembering -- or making up -- Bacanovic's sell recommendation.