Opinion ID: 792809
Heading Depth: 4
Heading Rank: 8

Heading: Faneuil's decision to contact the government

Text: 37 During the period between February and May 2002, Bacanovic talked to Faneuil about the investigation approximately five times, each time reiterating to Faneuil that he had spoken with Stewart and that everyone was on the same page and telling the same $60 stop-loss story, which was the truth. During one such conversation in April or May, Faneuil reminded Bacanovic that it was Faneuil who spoke with Stewart on December 27th and that he knew what actually had been said. At that point, according to Faneuil, Bacanovic said, don't even say that, just don't even say that. Faneuil admitted at trial, however, that Bacanovic never explicitly told him to lie. A month or two later, in June 2002, although he had not been served with a subpoena, Faneuil admitted to Merrill Lynch and to the government investigators that he had lied twice to the SEC about the content of his December 27th phone conversation with Stewart. Faneuil testified at trial that the lies and subsequent cover-up became too much to bear. Faneuil entered into a cooperation agreement with the Government, pleading guilty to the misdemeanor charge of receiving money or things of value as a consideration for not informing against a violation of the law in violation of 18 U.S.C. § 873. He agreed with the SEC to a lifetime exclusion from work in the securities industry. 3. Stewart's June 2002 public statements 38 In June 2002, media reports stated that a congressional investigation into the FDA's denial of the Erbitux application had revealed the December 27th ImClone transactions by Waksal and Stewart. Thereafter, the value of MSLO shares declined, which resulted in a corresponding decrease in Stewart's net worth. Stewart issued two public statements, one in a press release and one addressed to a conference of securities analysts and advisors. Stewart explained that her sale had been triggered by the pre-existing decision to sell ImClone if and when it reached $60 per share and not by information that was unavailable to the public. She also represented that she had cooperated fully with government investigators. MSLO shares enjoyed a modest rebound.