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Updated from 1:02 p.m. EST

Securities and Exchange Commission

attorney Helene Glotzer testified Tuesday about conversations she had in early 2002 with an impatient Martha Stewart.

In a Feb. 4, 2002, meeting Glotzer had with Stewart at the U.S. attorney's office in New York, Stewart supported former

Merrill Lynch

broker Peter Bacanovic's story about a $60 sell order for

ImClone Systems


shares, and said she placed the order with Bacanovic. It was later revealed that Stewart placed the trade with Bacanovic's assistant Douglas Faneuil.

After describing the events surrounding the fateful ImClone trade on Dec. 27, 2001, and her relationship to former ImClone CEO Sam Waksal, Stewart asked Glotzer in her own inimitable fashion if the meeting was coming to a close.

"Can I go now? I have a business to run," Stewart asked.

Stewart and Bacanovic, a former Merrill Lynch employee, are on trial in New York for obstructing an investigation into the sale of the ImClone stock.

Federal prosecutors allege that Stewart and Bacanovic conspired to cover up the events surrounding her sale of nearly 4,000 ImClone shares. Her fortuitous divestiture happened just before the public announcement of an unfavorable regulatory ruling on ImClone's premier cancer drug sent share prices tumbling.

Later in Tuesday's testimony, Bacanovic's attorney Richard Strassberg, seemed to shake Glotzer when questioning her on her memories of the telephone conversations with Faneuil and Bacanovic -- for which she did not take notes.

Strassberg was adamant about impeaching the witness because Glotzer was employing the notes of another SEC attorney, Jill Silansky, to guide her recollections.

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Glotzer is expected to resume testifying Wednesday morning.

Fateful Phone Log

Tuesday morning, Stewart's phone records dominated testimony.

The day opened with Stewart's personal assistant, Anne Armstrong, describing how the take-charge domestic diva altered a telephone message from Bacanovic. The message warned that her ImClone shares were headed for a fall.

A day after breaking into tears on the witness stand, Armstrong, Stewart's personal assistant at

Martha Stewart Omnimedia


since 1998, told jurors how her boss sat in her chair and retyped a Dec. 27, 2001, message about the biotech company to make it look less like a stock tip.

Stewart and Bacanovic claim they had a previous arrangement that she would sell her shares when the price dropped below $60.

Armstrong said that on Jan. 31, 2002, Stewart sat at the assistant's desk, opened a log of telephone messages on her computer, and changed a message that read "Peter Bacanovic thinks ImClone is going to start trading downward," to "Peter Bacanovic re: imclone." Armstrong said it was the first time she had seen Stewart alter a message.

Under questioning from Assistant U.S. Attorney Michael Schacter, Armstrong said Stewart then let her assistant back in her seat and told her to "put it back the way it was." Stewart then asked Armstrong to get her son-in-law, lawyer John Cuti, on the phone and walked into her office.

After Cuti spoke to Stewart, he immediately called Armstrong to arrange a meeting. Cuti, who is married to Stewart's daughter Alexis, was said to have performed legal work for Stewart in the past.

While Stewart was away, Armstrong discovered that changing the message back to its original wording would not be a simple operation. At a dinner meeting in downtown New York, Armstrong explained her difficulties in restoring the phone log to its original wording.

"I told him my quandary about getting it back," Armstrong said. "My messages don't get backed up on the server every night."

Armstrong finally was able to retrieve the original message a couple of days later in early February with the help of a staff writer from Stewart's magazine. The original message was found in the computer's "trash" bin, after having been deposited there in a computer crash on Jan. 4.

When Stewart defense attorney Robert Morvillo cross-examined Armstrong about the episode, he was less concerned about the mechanics of the alleged phone log cover-up than Stewart's actions immediately afterward.

Morvillo had Armstrong repeat to the jury that Stewart immediately asked her to change the log back to the original message. He also asked Armstrong if Stewart "ever asked her to lie about the incident," to which Armstrong replied that she had not.