Federal prosecutors are talking to the Merrill Lynch & Co. assistant to Martha Stewart’s stock broker about granting him immunity in exchange for his testimony on alleged insider-trading of ImClone Systems Inc. stock, the Wall Street Journal reported Thursday.
The assistant, Douglas Faneuil, 26, originally agreed with Stewart, who has said she had a standing order to sell her ImClone stock at a pre-determined price before it fell. But Faneuil has since changed his story and now says there was no such agreement.
If a deal granting Faneuil immunity from prosecution is reached, he could receive leniency that might mean he would receive no jail time, the Journal’s sources says.
One impetus behind the potential deal is that any case against Stewart could be weakened if Faneuil were to be indicted for making false statements, the Journal said.
On Wednesday, ImClone founder Samuel Waksal was indicted by a federal grand jury on insider-trading and other charges for trying to sell his shares of the company and tipping off family members ahead of the Dec. 28 decision by the Food and Drug Administration not to review the company’s promising cancer drug.