Stewart betrayed by friend’s testimony

ONE of Martha Stewart’s closest friends has dealt a harsh blow to her longtime pal by testifying that the trendsetter told her she sold ImClone Systems Inc shares after learning the biotech company’s founder was dumping his stock.

Mariana Pasternak, who was on vacation with Stewart in Mexico in December 2001, told a hushed courtroom that the conversation occurred when the two were seated on the terrace of a hotel discussing friends’ plans for the end of the year.

She said they began to talk about Sam Waksal, one of their friends and the founder of ImClone.

Pasternak, who has been a close friend of Stewart’s for more than 20 years, said she recalled Stewart saying Waksal “was selling or trying to sell his stock and his daughter was selling or trying to sell her stock”.

She said Stewart continued by saying “his stock is going down, or went down, and I sold mine”.

Pasternak, who testified that she had socialised with both Stewart and her stockbroker Peter Bacanovic, then quoted the trendsetter as saying “isn’t it nice to have a broker who tells you those things?”

Pasternak said she remembered the evening because she and Stewart had been out hiking and were too tired to go down to dinner.

She said the conversation occurred before the end of December 2001.

Prosecutors then showed a hotel bill for a guided hike that occurred on December 30.

Stewart and Bacanovic have been charged with lying to investigators about the ImClone trade, which prosecutors say was made due to an inside tip.