Stewart lawyers set for star witness

Lawyers for Martha Stewart get their first chance Monday to cross-examine the government's star witness against the homemaking mogul, a former brokerage assistant who has delivered damaging testimony against her.

Douglas Faneuil, the Merrill Lynch & Co. assistant who handled Stewart's well-timed sale of ImClone Systems Inc. stock in December 2001, is expected to return to the witness stand for his fourth day of testimony.

Faneuil, 28, testified last week that he was ordered by Stewart's broker, Peter Bacanovic, to tip her that ImClone founder Sam Waksal was selling his shares.

He also claimed Bacanovic, desperately trying to protect a lucrative career at Merrill, pressured him into initially lying to investigators. He changed his story in June 2002 and struck a plea deal with the government.

Stewart and Bacanovic are accused of repeatedly lying to the government about the circumstances of the sale. They claim they had a pre-existing deal to sell ImClone when it fell to $60.

On Thursday, Bacanovic's lawyers introduced e-mails in which Faneuil described Stewart yelling and cursing at him. In one, he told a friend that he had defended himself and "Baby put Ms. Martha in her place."

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The lawyers were hoping to show Faneuil despised Stewart, was fixated with her, and was out to get her.

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But Robert Mintz, a former federal prosecutor, said Faneuil's testimony has been convincing so far, particularly in explaining why he initially lied to the government.

"Doug Faneuil has come across as credible," he said, "and as someone who has found himself through no fault of his own as the linchpin of the entire prosecution case."