Opinion ID: 792809
Heading Depth: 4
Heading Rank: 2

Heading: Faneuil's January 3rd interview

Text: 24 Based on the results of its internal review, Merrill Lynch referred the ImClone matter to the SEC. The SEC launched an investigation, as did the FBI and the U.S. Attorney. On January 3, 2002, the SEC interviewed Faneuil by phone, focusing the inquiry on the Waksal family's trading on December 27th. With regard to Stewart's trade, Faneuil explained only that Stewart had called, requested a quote and decided to sell. He then reported the substance of the SEC interview to Bacanovic, using a borrowed cell phone to avoid any possibility that the call would be preserved on a Merrill Lynch taped line. On the following Monday, Faneuil approached Merrill Lynch about retaining outside counsel for him. 25 Soon after the January 3rd SEC interview, Faneuil received a call from Stewart's business manager, Heidi DeLuca, complaining that the ImClone sale generated a gain that compromised Stewart's tax loss selling plan and created a tax liability. Faneuil reported DeLuca's call to Bacanovic. Bacanovic then gave Faneuil a different explanation for the trade, insisting that Stewart sold the ImClone stock on December 27th pursuant to a pre-existing agreement to sell if the price dropped to $60 per share, although no such order had been entered into Merrill Lynch's computer system. Called as a defense witness at trial, DeLuca confirmed the existence of that stop-loss order. She asserted, however, that the conversation with Faneuil regarding the ImClone gain took place in February, rather than early January as Faneuil had recalled.