The New York Times reports that Peter Bacanovic, the former Merrill Lynch broker at the center of the Martha Stewart ImClone Systems share case, wants a separate trial. He is clearly spooked that he will be disadvantaged should he be tried as co-defendant with Ms Stewart, as is currently planned.
Former ImClone CEO Samuel Waksal is currently behind bars as a result of an insider dealing conviction. Stewart, a friend of Waksal, and Bacanovic were indicted in connection with the sale of some of Ms Stewart's ImClone stock in December 2001, just one day before the share price bombed when US government officials announced that they were not intending to licence the company's cancer 'wonder-drug'.
Ms Stewart has always protested her innocence of wrongdoing and claims that the share sale at that time was a co-incidence as a 'stop-loss' policy was in place, which resulted in the sale of the shares as they hit the action price on the day in question. A former assistant to Bacanovic at Merrill Lynch, Douglas Faneuil, pleaded guilty to a misdemeanor charge over the affair last year and is said to have been helping prosecutors with their case ever since. Faneuil is believed to have earlier disputed the existence of a stop-loss policy.
Prosecutors claim that Bacanovic learned Waksal and his family were off-loading their ImClone stock and advised Ms Stewart to do the same. Ms Stewart has been charged with obstruction of justice and securities fraud for allegedly selling the shares after being illegally tipped off and then lying about it. Bacanovic is charged with interfering with a federal inquiry that sought to establish whether the share sale was illegal.
A separate trial for Bacanovic would certainly make sense for him as there is always the danger that the evidence against both the parties will merge into one and he could be damned merely by association.