[an error occurred while processing this directive] The jury accepted the prosecution's case that Stewart had sold her stock in the troubled biotech firm ImClone after Bacanovic had told his assistant to inform her that ImClone founder Sam Waksal was trying to sell his own stock. The day after Stewart sold, the Food and Drug Administration refused to review ImClone's application for Erbitux, a promising cancer drug, prompting a sharp drop in the share price. Stewart dumped hers at $58.43; the next day they opened at $45.39 a fall that would have cost her approximately $51,200 if she sold them immediately once the news was public.
The government's case was substantially assisted by the testimony of Douglas Faneuil, former assistant to Bacanovic, who testified that his boss had ordered him to share with Stewart the insider tip on Waskal's intentions. Stewart was convicted of lying to officials from the SEC, FBI and federal prosecutors when she told them she and Bacanovic had previously arranged an automatic sell order if the stock price fell below $60; and also of lying in her claim to SEC, FBI investigators and federal prosecutors when she claimed she did not recall being told of Waksal's planned stock sale. The jury also found that she and Bacanovic had "willfully and knowingly" worked together to obstruct justice and make false statements , and that she had "willfully and knowingly" tried to hamper the SEC investigation of her stock sale by providing misleading information.
Waksal is already serving a seven-year prison sentence after pleading guilty to securities fraud over his family's sale of their own ImClone stock. Sentencing experts reportedly suspect Stewart will be sentenced to jail time, although probably a minimal term. But the conviction could deal a heavy blow to the future business prospects of an empire branded on the good name and reputation of its eponymous icon.