Stewart’s broker says sell order for ImClone stock came in December
NEW YORK (AP) – Martha Stewart’s broker said the two decided on or after Dec. 10 – not late November as Stewart told congressional investigators – to sell shares of biotech ImClone Systems if the price fell below $60 a share, a published report said. The timing of the discussion allows for the possibility that the domestic living and design maven had inside information when selling the stock, The Wall Street Journal reported Monday, citing a source familiar with the broker’s version of the events. The source told the newspaper the broker’s notes from the conversation with Stewart support that timeline.
Stewart sold 3,928 shares of ImClone on Dec. 27, one day before the Food and Drug Administration announced its decision not to review ImClone’s application for Erbitux, a once highly touted drug to treat colorectal cancer. The stock has slid 90 percent since then.
Stewart is close friends with ImClone founder Samuel Waksal, who faces securities fraud charges for allegedly tipping off relatives to sell the company’s shares and lying to the Securities and Exchange Commission.
Stewart’s spokeswoman did not immediately return calls Monday.
A House Commerce and Energy subcommittee is investigating ImClone, and Stewart told investigators that she did not have nonpublic information when she and her broker decided to sell shares in ImClone if the stock price slipped below $60 a share. The decision was made several weeks after she was unable to sell all her shares in a tender offer by ImClone partner Bristol-Myers in October, she has said.
Stewart said her broker notified her on Dec. 27 that the shares had slipped to $58, and she authorized the sale. She said she phoned Waksal afterward, but that he did not return her call.
The committee has asked for Stewart’s phone and stock sale records.
Ken Johnson, a spokesman for the subcommittee, did not immediately return a phone message Monday. Stewart’s broker, Peter Bacanovic of Merrill Lynch & Co., also represents Waksal’s daughter, Aliza, according to the Wall Street Journal. Investigators say she sold stock after being tipped off to the FDA’s decision.
Bacanovic, who worked at ImClone for two years during the early 1990s, was unavailable for comment, said Merrill Lynch spokesman Joe Cohen.
“We do not discuss client relationships nor do we comment on investigations except to say that we cooperate fully with the proper authorities in all regulatory inquiries,” Cohen said. “We hold Peter in the highest regard and consider him a longtime valued member of the firm.”
Shares in Stewart’s company, Martha Stewart Living Omnimedia, have also been slipping in price over concern that the ImClone investigation may taint her company as well.