Martha Stewart's broker's gay assistant fined $2,000 (13204)

An openly gay former brokerage assistant who helped Martha Stewart make her fateful stock trade and later emerged as a key government witness was fined $2,000 but spared both prison and probation Friday for accepting a payoff during the government's investigation. U.S. district judge Miriam Goldman Cedarbaum imposed the fine against Douglas Faneuil one week after she sentenced the convicted homemaking entrepreneur to five months in prison and five months' home detention for lying to authorities. "I want to apologize for my mistakes," Faneuil told Cedarbaum. "Thankfully, I've learned my lesson."

His voice quavering, the defendant said he had feared his testimony would never prevail "against rich and powerful people. I was wrong, and for that I am immensely grateful." Faneuil had faced up to a year in prison after pleading guilty to the misdemeanor charge of accepting a payoff. But prosecutors recommended no jail time after his testimony helped them convict Stewart in federal court in Manhattan. Faneuil, 28, was an assistant to Stewart's stockbroker and codefendant, Peter Bacanovic, who was convicted along with Stewart and received the same sentence as Stewart did. Prosecutors had alleged that in 2001, Bacanovic ordered Faneuil to tip Stewart that her longtime friend Sam Waksal was dumping shares of his biotechnology company, ImClone Systems Inc. Waksal had advance knowledge of a government report on an experimental drug that later sent shares of ImClone into a freefall. Stewart and Bacanovic always maintained she sold because of a preset plan to unload the stock when it fell to $60, a claim Faneuil backed before pleading guilty.

At trial, Faneuil told jurors that Bacanovic, after learning Waksal was trying to sell, told him, "Oh, my God. Get Martha on the phone." On orders from his boss, Faneuil said he told Stewart about Waksal and then was ordered by Stewart herself to sell her stable of 3,928 shares, which netted Stewart about $228,000. The government has contended Bacanovic plied Faneuil with extra vacation time and airline tickets in exchange for supporting the story about the $60 stock order. Faneuil said the broker offered him a week's vacation and a trip to Argentina in early 2002. The defense tried to discredit Faneuil as an admitted drug user and a liar. Lawyers used e-mails to show jurors he had a spiteful fixation on Stewart while he worked at Merrill Lynch & Co. After handling a call from Stewart, Faneuil told a friend in an e-mail: "I have never, ever been treated more rudely by a stranger in my life." Three days later, he wrote to another friend: "Martha yelled at me again today, but I snapped in her face and she actually backed down! Baby put Ms. Martha in her place!!!" Both Stewart and Bacanovic are free pending appeal.