Free Tangled Webs by James B. Stewart Page B

clearly declining. Why would you hold it?’ And she goes . . . and at that point, we determined that if, in fact, it fell much further, then we would sell it.”
    “Did she give you any indication as to why she wanted to hold the stock?” Glotzer continued.
    “Many of my clients invest in certain companies out of loyalty and friendship and they like to say they own each other’s stock.”
    “And so your recommendation to her was to sell because the price was declining?”
    “Correct.”
    Slansky continued the questioning. “Did you hear any rumors on Wall Street or by analysts that, you know, this drug wasn’t going to be approved?”
    “None whatsoever.”
    “So, going back, she didn’t really want to sell it; you recommended that she sell it. You can continue on from there.”
    “So, we made a deal. I said, ‘Okay, if you would not like to sell the stock now, how low are you going to wait before you sell this stock?’ ”
    “I’m sorry, on December 20, when you had this conversation, do you remember what the price of the stock was?”
    “It was in the mid-60s. And at that point we determined that $60 a share would be a suitable share price, should it ever fall that low. Of course, she never thought it would.”
    “And did she place a limit order [an order to sell that would automatically be executed if the price hit $60]?”
    “[She] did not. We did not put an order into the system. She does not like doing that . . . so I said, ‘We’ll watch the stock for you.’ ”
    Glotzer jumped in. “So, I mean, every day, then, would you basically look at the price of ImClone?”
    “Well, while on vacation, this is a little . . . here we have a problem. I mean, I cannot keep up with all my prices during that time. And I was a little bit alarmed on the morning of the twenty-seventh. I hadn’t really thought about ImClone on the twenty-sixth or twenty-seventh, to be honest. I was really relieved, in fact, not to be thinking about ImClone. And when my assistant called me that morning, and all of a sudden ImClone was on my mind again, and I got a price on the stock, I thought, Oh, I better find Martha now. I just had this conversation with her a week ago, and here we are.”
    Slansky continued: “You recommended that she sell, you picked a price of $60.”
    “Yes.”
    “Is that correct?”
    “Yes. Yes. Back on the twentieth.”
    Slansky asked him to continue.
    “In answer to your question, I had not looked at the price of ImClone since I left the office at 1:00 p.m. on the twenty-fourth, which was Monday. The holiday was Tuesday, and Wednesday I was in transit to Florida. So, it is now Thursday. I’m still–I’m just getting settled in for this holiday. This phone call comes in the morning. I haven’t been out of the office for more than a day at this point, and all of a sudden, you know, sooner–much sooner–I didn’t expect ImClone to move that quickly, at least in a decline. And my assistant was telling me, ‘Well, the price of this stock is now at . . .’ lower than when I last looked at it.”
    “Do you remember if it was about $60 at this point?”
    “I believe it was just at $60. I believe. You know, within pennies of $60. And at that point, I thought, you know, I just had this conversation. This is someone who gets irascible. And I thought, So much for the vacation. Let’s try and track down Martha, find Martha, which is the process I normally go through, and I’ve had to call her all over the world with conversations like this. And you initiate the process, which is calling the office. ‘Is Martha findable?’ Martha got back to us, spoke to my assistant. We did the trade.”
    “Did you ever tell Martha Stewart that the SEC had been speaking with Merrill Lynch about sales in ImClone at the end of the year?”
    “I said that we had . . . we had been reviewing this internally. And that was all.”
    “In other words, you didn’t mention that the SEC was looking into