Broker Delivers Phone Records
Martha Stewart’s broker, who has emerged as a key link in the ImClone Systems trading scandal, avoided charges of contempt of Congress, and handed over his home phone and cell phone records for December to congressional investigators late Monday.
“We met the deadline,” said Melissa Berenson, a spokeswoman for Richard Strassberg, the attorney representing Peter Bacanovic.
On July 8, the House Energy and Commerce Committee, which is investigating trading in ImClone shares, issued a subpoena to Bacanovic threatening him with contempt of Congress if the records weren’t delivered by Monday.
Bacanovic worked at Merrill Lynch & Co. and orchestrated Stewart’s highly scrutinized sale of nearly 4,000 shares of ImClone on Dec. 27, the day before the Food and Drug Administration announced publicly that it had rejected the biotech firm’s application to review its cancer drug Erbitux.
The company’s shares subsequently plummeted.
Congressional investigators are hoping to clear up conflicting accounts of what happened. They also want to find out whether Bacanovic contacted any of his other clients about ImClone.
“Our investigators are currently reviewing the phone records and are trying to determine who he called, and when he called them,” Ken Johnson, a committee spokesman said Monday.
Stewart, chief executive of Martha Stewart Living Omnimedia Inc., is a personal friend of Samuel D. Waksal, the former ImClone chief executive who was arrested June 12. Waksal was charged with insider trading for allegedly trying to sell his stock and for allegedly tipping off family members after learning of the FDA’s decision.
Waksal has denied wrongdoing. Stewart also has repeatedly denied that she did anything improper.
Bacanovic is the broker for Waksal and his daughter Aliza, as well as Stewart.
Bacanovic was on vacation in Florida on Dec. 27, but Stewart’s trade was executed by his assistant, Douglas Faneuil.
Bacanovic, along with Faneuil, was placed on paid leave by Merrill Lynch late last month, after an investigation that revealed discrepancies in their statements.
Stewart has maintained that she had a prearranged agreement with Bacanovic to sell ImClone stock when it fell below $60.
Johnson also confirmed Monday that several key ImClone officials, including the company’s top lawyer, John Landes, sold shares weeks before even Stewart bailed out.
Johnson confirmed that Landes sold 2.5 million shares Dec. 6, while Ronald Martell, the vice president of marketing, sold 2.1 million shares five days later.
From Dec. 12 to Dec. 21, four other unnamed executives dumped ImClone stock, he said.
Johnson said that after Samuel Waksal returned from his vacation in the Caribbean on Dec. 26, he made a number of calls, including one to Landes, with whom he had the longest conversation.
