Report: Martha Stewart Broker Says Assistant Lied

Martha Stewart reportedly received information about insider stock sales in ImClone Systems ( IMCL) from the assistant to her Merrill Lynch ( MER) broker, the broker claims.

The Financial Times of London cited people familiar with the broker, Peter Bacanovic, who say the assistant falsely claims that he told Stewart about the selling at Bacanovic's behest.

Stewart, the design guru who heads Martha Stewart Living Omnimedia ( MSO), is under federal investigation for her sale in December of about 4,000 ImClone shares shortly before their price was crushed by a negative Food and Drug Administration ruling.

Stewart has told investigators the shares were sold under an existing agreement, and has denied any wrongdoing in the sale.

The story emerged the same day ImClone's former chief executive, Sam Waksal, pleaded innocent to fraud and conspiracy charges for allegedly tipping off family members. Waksal is a friend of Stewart's and he and his daughter were clients of Bacanovic.

According to the FT, people familiar with Bacanovic's version of events claim the broker believes his assistant, Douglas Faneuil, lied about receiving orders to tip Stewart, to cover his own role in the sales. Neither the broker nor Stewart has been charged in the investigation, and lawyers for all three reportedly declined to comment on the story.

Bacanovic and Faneuil were placed on paid leave by Merrill in June after Faneuil contradicted Bacanovic's explanation for the sale.

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