Martha Stewart Altered Phone Logs

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FEBRUARY 10--With federal investigators eyeballing her curious sale of ImClone stock, Martha Stewart altered a message left by her stockbroker regarding the firm's declining stock price, according to documents entered into evidence today by New York federal prosecutors. Stewart's tweaking of the computerized December 27, 2001 phone message came one month later, on January 31, 2002, when she sat down at her assistant's computer and clipped the original message, which read, "Peter Bacanovic thinks ImClone is going to start trading downward." Martha's revised version was more succinct: "Peter Bacanovic re: ImClone." Bacanovic's December 2001 message came on the day Stewart sold her 3928 ImClone shares, one day before the firm announced a crucial ruling against it by the Food and Drug Administration. According to Ann Armstrong, Stewart's assistant who testified in U.S. District court today, her boss "instantly stood up, still standing at my desk, and told me to put it back to the way it was." Thanks to the marvels of modern computing, investigators were able to retrieve Stewart's (briefly) revised version of Bacanovic's message as well as the original message log entry, copies of which you'll find below. The altered message is a crucial piece of evidence against Stewart, whose editing activity could easily be construed by jurors as an attempt by the homemaking queen to cover her tracks after offloading her ImClone position before the stock cratered. Prosecutors allege that Stewart's sale was triggered when Bacanovic told her that family members of ImClone founder Sam Waksal were racing to dump their shares in the biomed company. (2 pages)