Timeline of Events

Wednesday, Sept. 19, 2001

Bristol-Myers Squibb files a tender offer for 14.4 million ImClone shares at $70. Martha Stewart tenders all her shares (5,000).

Friday, Oct. 26, 2001

Bristol-Myers tender offer expires. A total of 67.1 million shares are tendered. Bristol buys 21 percent of the offered shares, leaving Stewart with 3,928.

Wednesday, Oct. 31, 2001

ImClone files an application with the FDA to have Erbitux reviewed. The FDA has 60 days (until Dec. 31) to accept or reject the application.

Dec. 20 or 21, 2001

• Stewart's Merrill Lynch financial consultant, Peter Bacanovic, prints a worksheet listing all the stocks in Stewart's account, priced at the Dec. 20 close.
  
• While reviewing the portfolio on the telephone with Stewart, Bacanovic makes handwritten marks on the sheet in blue ballpoint ink.
  
• Bacanovic recommends that Stewart sell her remaining ImClone position, but she doesn't. Instead, she allegedly agrees to sell it if it falls to $60.
  
• Bacanovic begins to execute tax-loss selling in 22 stocks for Stewart.

Monday, Dec. 24, 2001

Bacanovic continues tax-loss selling in 22 stocks for Stewart.

Thursday, Dec. 27, 2001

9-10 a.m.

• Bacanovic is out of the office, on vacation in Miami. Stewart is in the air, en route to Mexico.
  
• Bacanovic's assistant, Douglas Faneuil, receives call from the daughter of ImClone CEO Sam Waksal placing an order to sell all her shares (worth $2.5 million).
  
• ImClone begins trading down sharply, on high volume, amid rumors that the FDA will reject the Erbitux application.
  
• Faneuil receives written request from Sam Waksal to transfer all the ImClone shares in his account to his daughter's account (worth $4.9 million).
  
• Faneuil receives call from Waksal's accountant placing an order to sell all the transferred shares; Merrill holds order pending legal approval.
  
• Faneuil informs Bacanovic about the Waksal sale and attempted sale (and, presumably, about the rumors and stock action).

10:04 a.m.

• Bacanovic and Faneuil call Martha Stewart's office together and leave a message that Stewart's assistant records as "Peter Bacanovic thinks ImClone is going to start trading downward."
  
• The ImClone price at the time of the call is approximately $61.50/share, down from $63.50 at the open.
  
• Bacanovic allegedly tells Faneuil to tell Stewart about the Waksal transactions when she calls back.

1:26 p.m. Stewart's jet lands in San Antonio, Texas, to refuel.

1:30 p.m. Stewart calls her home answering machine (1 minute).

1:31 p.m. Stewart calls her New York office and speaks to her assistant, Ann Armstrong. They discuss business matters and phone messages, including Bacanovic's.

1:39 p.m.

• Armstrong patches Stewart through to Bacanovic's office. Bacanovic is in Miami, so Faneuil takes the call.
  
• Faneuil allegedly tells Stewart about the attempted Waksal sales (and, presumably, about the stock action and rumors as well).
  
• Stewart directs Faneuil to sell all her remaining ImClone shares, 3,928. The transaction is completed at an average price of $58.43, yielding $228,000.

1:41 p.m.

• After placing her sell order with Faneuil, Stewart hangs up and calls Sam Waksal.
  
• Waksal is not available. Stewart's message is recorded as, "Martha Stewart something is going on with ImClone and she wants to know what … "

4:00 p.m. ImClone closes down nearly 10 percent, at $58, on volume of nearly 8 million shares (versus average of about 1.5 million).

Friday, Dec. 28, 2001

• 9:30 a.m.-4 p.m. ImClone continues to trade down sharply on extreme volume (7 million shares), closing at $55.
  
• After 4 p.m. ImClone announces that the FDA won't accept the Erbitux application.

Monday, Dec. 31, 2001

9:30 a.m. On the first day of trading after the Erbitux announcement, ImClone opens at $45.39.

(For discussion/analysis of above events, see Dispatches No. 3 and No. 4)

Thursday, Jan. 3, 2002

In an investigation into suspicious ImClone trading, the SEC interviews Faneuil by telephone. He allegedly does not truthfully reveal all he knows.

Monday, Jan. 7, 2002

SEC interviews Bacanovic by phone, asking about, among other things, Martha Stewart's sale. Bacanovic allegedly makes the following false statements:

• In a conversation on Dec. 20, Martha Stewart said she had decided to sell shares if the stock fell below $60.
  
• On Dec. 27, Bacanovic spoke to Stewart and told her the stock had broken $60, and she placed order with him.

Wednesday, Jan. 16, 2002

Bacanovic and Stewart meet for breakfast in New York.

Sometime in January

Bacanovic allegedly encourages Faneuil to "refrain from disclosing" that Stewart knew about Waksal selling.

Friday, Jan. 25, 2002

The FBI and U.S. attorney contact Stewart to interview her. The interview is scheduled for Feb. 4. After Stewart is contacted, she places a call from her cell to Bacanovic's cell (duration not specified).

Monday, Jan. 28, 2002

The SEC issues a document request to Merrill Lynch for documents relating to, among other things, Martha Stewart's account.

Tuesday, Jan. 29, 2002

The SEC document request is communicated to Bacanovic by Merrill officials.

Wednesday, Jan. 30, 2002

• Bacanovic provides Merrill with the worksheet that he used in the Dec. 20-21 "selling discussion" with Stewart.
  
• The U.S. attorney will later allege that Bacanovic altered the worksheet before producing it, adding "@60" to provide false documentary corroboration for the alibi.

Thursday, Jan. 31, 2002

• After a lengthy conversation with her attorney, Stewart changes the Bacanovic phone message of Dec. 27 to "Peter Bacanovic re imclone."
  
• After altering the message, Stewart directs her assistant to change it back to the original wording.

(For discussion/analysis of above events, see Dispatch No. 5. For a detailed discussion of the temporarily altered phone log, see Dispatch No. 6.)

Monday, Feb. 4, 2002

7:09 a.m. Bacanovic places a call from his cell to Stewart's cell (duration not specified).

Stewart and her attorneys meet with investigators from the SEC, FBI, and U.S. attorney in New York. The interview is voluntary and unsworn. Stewart allegedly makes the following false statements:

• When ImClone was trading at $74 (Dec. 5-6), Stewart and Bacanovic both decided that she would sell if it dropped below $60.
  
• Stewart did not know if the Dec. 27 phone message from Bacanovic was in her phone log.
  
• On Dec. 27, Stewart spoke to Bacanovic, and he said ImClone was trading below $60 and asked her if she wanted to sell.
  
• Stewart said yes, sell, because she didn't want to be bothered over her vacation.
  
• She and Bacanovic also talked about Martha Stewart Living Omnimedia stock and Kmart.
  
• From Dec. 28 to the present, she had only had one conversation with Bacanovic regarding ImClone and discussed only public information.
  
• Bacanovic had mentioned that Merrill had been questioned by the SEC about ImClone, but not Bacanovic and not about Stewart's account in particular.

The SEC subpoenas Bacanovic to provide testimony under oath. The interrogation is scheduled for Feb. 13.

(For discussion/analysis of Stewart's first U.S attorney interview, see Dispatch No. 7.)

Tuesday, Feb. 12, 2002

Stewart places multiple calls from her apartment to Bacanovic's office (no duration specified).

Wednesday, Feb. 13, 2002

In the morning, Stewart places a call from her home to Bacanovic's office (no duration specified). In the afternoon, Bacanovic testifies at the SEC.

At the SEC, Bacanovic allegedly gives the following false testimony:

• The gist of the message he left for Stewart was to give her the price of the stock and ask her to please call us back.
  
• After the close on Dec. 20, Stewart and Bacanovic had a phone conversation in which she decided to sell IMCL if it fell to $60.
  
• He has notes about this conversation.
  
• From Dec. 28 to the present, he and Stewart did not discuss Stewart's sale of ImClone.
  
• He did not tell Stewart that the SEC had asked questions regarding that sale.

Importantly, Bacanovic also gives the following ACCURATE testimony:

• On Dec. 27, Stewart spoke to Faneuil, not him.

(For discussion/analysis of Stewart's boneheaded calls to Bacanovic prior to his SEC testimony and the potential miscommunications with her attorneys that might have allowed them to happen, see Dispatch No. 8. For discussion/analysis of Bacanovic's SEC testimony, see Dispatch No. 9).

Thursday, Feb. 14, 2002

Merrill produces documents to the SEC, including the allegedly altered worksheet.

Thursday, March 7, 2002

Faneuil is interviewed by FBI agent and SEC attorneys. Again, Faneuil allegedly does "not truthfully reveal all he [knows]. …"

Wednesday, April 10, 2002

• Stewart is interviewed by telephone by the SEC, FBI, and U.S. attorney, again unsworn.
  
• Stewart allegedly makes the following allegedly false statements.
  
• She did not recall whether she and Bacanovic had discussed Sam Waksal on Dec. 27, or being informed (by Bacanovic) that the Waksals were selling.
  
• She said the conversation in which she decided to sell at $60 took place in November or December, after she sold her other ImClone shares (Oct. 26).
  
• On Dec. 27, she spoke to Bacanovic, who said ImClone was trading below $60 and suggested she sell.

(For discussion/analysis of Stewart's second U.S. attorney interview, see Dispatch No. 10.)

Thursday, June 6, 2002

• After the close, the Associated Press reports that Stewart sold ImClone before the Erbitux announcement. This hasn't previously been publicly reported.
  
• Stewart is informed that the Wall Street Journal plans to publish an article about her ImClone sale.
  
• Stewart's attorney tells the Journal that Stewart sold because of the $60 agreement.

Friday, June 07, 2003

• The stock of Martha Stewart Living Omnimedia (MSO) starts trading off: from a $19.01 close on June 6 to $11.47 on June 28.
  
• Journal article published (Stewart's explanation is already public when stock starts trading down).

Wednesday, June 12, 2003

Sam Waksal is arrested and charged with criminal insider trading. After the close, Stewart releases a public statement. The document contains the following allegedly false statements:

• Stewart established the $60 agreement with her broker several weeks before the sale.
• On Dec. 27, "I returned a call from my broker advising me that ImClone had fallen below $60 … and reiterated my instructions to sell."
  
• "Did not have any nonpublic information regarding ImClone when I sold my ImClone shares."

Thursday, June 13, 2002

MSO opens up (as noted in the indictment, as evidence that Stewart's explanation had a material impact on the stock price), but closes down (as noted in Stewart's motion to dismiss).

Tuesday, June 18, 2002

Stewart releases another statement after the close. The document contains the following allegedly false statements:

• "In my June 12, 2002 statement, I explained what did happen."
  
• The Dec. 27 sale "was based on information that was available to the public that day."
  
• "Since the stock had fallen below $60, I sold my shares, as I had previously agreed to do with my broker."
  
• Stewart cooperated with the SEC and U.S. attorney's office "fully and to the best of [her] ability."

Wednesday, June 19, 2002

Morning: Stewart reads the statement at investor conference. MSLO stock opens flat (as noted in Stewart's motion to dismiss) and closes up (as noted in the indictment).

Friday, June 20, 2002

• Faneuil flips, changing his story and disclosing to Merrill officials the "true facts" about Bacanovic and Stewart's actions on Dec. 27.
  
• Specifically, Faneuil says that he was unaware of a $60 agreement and that Bacanovic urged him to withhold the information about the Waksal sales.
  
• Faneuil says that, in exchange for withholding the information, Bacanovic offered him extra vacation and a plane ticket.
  
• Shortly thereafter, Faneuil discloses the "true facts" to the SEC and U.S. attorney, perhaps in exchange for a lesser charge (misdemeanor).
  
• Because of the discrepancy in the stories of Bacanovic and Faneuil, Merrill Lynch puts both men on paid leave.

Thursday, Oct. 02, 2002

• Faneuil pleads guilty to a misdemeanor—accepting bribes for not informing.
  
• Merrill Lynch fires Faneuil and Bacanovic.

Wednesday, June 4, 2003

• Martha Stewart and Peter Bacanovic are indicted by the U.S. attorney.
  
• Stewart is also charged by the SEC for insider trading.

Monday, Nov. 18, 2003

Judge Miriam G. Cedarbaum denies Stewart and Bacanovic's motions to dismiss charges and "sever" the trials. Trial is set for mid-January.

(For discussion/analysis, see Dispatch No. 1.)