Prosecutors concluded their case against Martha Stewart Friday by calling two friends of broker’s assistant Douglas Faneuil to back up testimony that he improperly tipped Stewart and then lied to government investigators about the circumstances of Stewart’s sale of ImClone Systems Inc. stock.

Faneuil’s college friend Zeva Bellel said that Faneuil told her on Jan. 4, 2002, that he had — on Merrill Lynch & Co. broker Peter E. Bacanovic’s orders — tipped Stewart that ImClone founder Samuel D. Waksal was selling his shares in the company. ImClone announced bad news the day after that sale, and Waksal is currently serving seven years in prison for securities fraud.

A day or two later, Bellel told the eight women and four men on the jury, she had another conversation with Faneuil. Bellel said her friend told her he had asked Bacanovic what he should tell federal investigators who were asking questions about Stewart’s sale. According to the young freelance journalist, Faneuil said his boss had replied, “Listen, nothing happened. There was nothing wrong with this sale. This was how it happened.”

But that answer left Faneuil “at a loss” Bellel said. “He felt abandoned and betrayed. The sequence Peter had just described was totally inaccurate.”

Bellel’s testimony, and that of another Faneuil friend who said the broker’s assistant told her in April 2002 that he had just “lied for his boss,” are crucial because Faneuil waited until June 2002 to tell federal regulators about his alleged tip to Stewart. Defense lawyers contend he changed his story because widespread publicity about Stewart’s sale that month caused him to fear that the government was closing in on him.

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