Assistant: Stewart altered message

? With an investigation looming, Martha Stewart sat down at her assistant’s computer and altered a record of a message left by her stockbroker about ImClone Systems stock, the assistant testified Tuesday.

Stewart immediately stood up and ordered the message restored to its original wording, Ann Armstrong said.

The original message read: “Peter Bacanovic thinks ImClone is going to start trading downward.” It reflected a call by Bacanovic on Dec. 27, 2001, the day Stewart sold her 3,928 shares in the company.

Armstrong testified Stewart saw the message about a month later, on Jan. 31, 2002, and replaced it with the words: “Peter Bacanovic re imclone.”

“She instantly stood up, still standing at my desk, and told me to put it back to the way it was,” the assistant testified at Stewart’s stock-fraud trial in federal court.

Armstrong told jurors she was “startled” by Stewart’s conduct, and that she had never before altered a message in the log, which Armstrong maintains at Martha Stewart Living Omnimedia, Stewart’s media company.

According to a federal indictment, Stewart claimed in an interview with investigators that she did not know whether Bacanovic’s message from Dec. 27 had been recorded in Armstrong’s message log.

Prosecutors walked Armstrong through her memory of January and early February 2002 in hopes of convincing jurors Stewart was worried about the circumstances of her sale of ImClone.

They introduced a calendar entry showing Bacanovic scheduled a breakfast with Stewart at a Manhattan restaurant on Jan. 16, 2002, about three weeks after the stock sale.

The government alleges Stewart was tipped by Bacanovic that the family of ImClone founder Sam Waksal was trying to sell his shares on Dec. 27. Stewart and the broker say they had a pre-existing deal to sell ImClone at a fixed price.