Martha Stewart and Peter Bacanovic were indicted on criminal charges arising from Martha Stewart's sale on December 27, 2001, of 3,928 shares of ImClone Systems, Inc. ("ImClone" ). ImClone is a biotechnology company whose then CEO, Samuel Waksal, was a friend of Stewart's and a client of Stewart's stockbroker at Merrill Lynch, defendant Peter Bacanovic. On December 25, 2001, ImClone learned that the Food and Drug Administration had rejected the company's application for approval of Erbitux, an anticancer drug. On December 28, the day after Stewart sold her shares; ImClone publicly announced that Erbitux's application had been rejected. Shortly after ImClone's announcement, the Securities and Exchange Commission "SEC" and the United States Attorney's Office for the Southern District of New York began investigations into ImClone's stock trading prior to the public announcement of the news about Erbitux. During the investigation each accused was questioned twice. Martha Stewart was interviewed at the U.S. Attorney's office on February 4, 2002 and by telephone on April 10, 2002. Among those present during Stewart's interviews were FBI Special Agent Catherine Farmer and Helene Glotzer , an SEC enforcement attorney. Division. Peter Bacanovic was interviewed by telephone on January 7, 2002. Present at the interview were Glotzer and another SEC lawyer, Jill Slansky, as well as David Marcus, a Merrill Lynch lawyer. On February 13, 2002, Peter Bacanovic testified under oath before the SEC. He was questioned by three SEC lawyers: Glotzer, Slansky and Laurent Sacharoff. His testimony was recorded on tape. The jury convicted Stewart of making false statements to investigators during his February 4 interrogation, in violation of 18 USC § 1001. The jury found Stewart guilty of making the following false statements, each of which was a specification in the Count Three of the prosecution. Martha Stewart told government investigators that she spoke with Peter Bacanovic on December 27 and ordered him to sell his ImClone shares after he informed her that ImClone was trading at less than $60 a share. Martha also stated that during the same phone call, she and Peter Bacanovic discussed the stock performance of her company, Martha Stewart Living Omnimedia ("MSLO"), and discussed K-Mart. She told investigators that she decided to sell her ImClone shares at that time because she didn't want to be disturbed during the holidays. Stewart said she did not know whether there was any record of a phone message left by Peter Bacanovic on Dec. 27 in her assistant's message log..