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He was one of thousands of promising young people who venture to New York City after college each year to pursue their dreams. And by all accounts, he had the right combination of polish, looks, and style to move comfortably along the fringes of Manhattan's ruling social elite.

And yet this autumn Douglas Faneuil surprised friends and acquaintances by stepping out from the sidelines and into the spotlight as the first person to admit guilt in the Martha Stewart-ImClone stock scandal. In a plea bargain announced October 2, the 27-year-old former assistant to Merrill Lynch financial adviser Peter Bacanovic, who was Stewart's broker, pleaded guilty to misdemeanor charges of misleading federal investigators about the real reason for Stewart's sale last December of 3,928 shares of the drug company ImClone Systems' stock, valued at about $228,000.

In contrast to the endless parade of billion-dollar corporate crimes that has marched across the national stage in recent months, Faneuil's infractions seem relatively small. Certainly, they seem trivial compared with those of another gay man, Michael Kopper. Kopper admitted in August to stealing $12 million from investors during his tenure as a finance executive at Enron Corp., the Houston-based energy company.

According to court documents, Faneuil broke the law by accepting additional compensation--reported elsewhere to be $500, an extra week's vacation, and an airline ticket--from Bacanovic in exchange for keeping quiet about the motivation behind Stewart's stock sale.

Still, some observers wonder why in this case, as in the Enron case, a gay man is again the first person to admit guilt. "It would not surprise me [if Faneuil] had some deep conflict going on about what to do," says Susan Gore, a specialist in gay and religious issues in the workplace and the principal of the Mentor Group, a Dallas-based business consulting firm. "It may be because he is gay that he is more willing to be honest. Coming out is a process that gay people go through all the time, and telling the truth is part of our experience."

As the legal noose tightens around Stewart, prosecutors are trying to determine what really happened in late December of last year, when, as she claims, a standing order to sell her ImClone holdings was triggered when the stock price dropped to a predetermined level. Sam Waksal, the founder and chief executive officer of ImClone, pleaded guilty on October 15 to six counts of insider trading and other charges in connection with the case. Prosecutors had alleged that Waksal illegally advised family members to sell their company stock after he learned on December 26 that the Food and Drug Administration had nixed approval of an anticancer drug called Erbitux, which the company had developed and had been hoping to market. The drug's promise had contributed to ImClone stock's steep jump in price to around $72 a share in November 2005.

The FDA made its decision public on December 28. The following trading day ImClone stock's price declined 16%. The stock currently trades at around $7, about 90% less than its 52-week high. But by December 29, Waksal's family and friends, including Stewart, had completely divested themselves of their holdings in the company.

Though Bacanovic is not named explicitly in the court documents regarding Faneuil, the documents allege that Stewart was tipped off about the likelihood that the stock would fall and urged to sell her holdings. Faneuil's role, according to prosecutors, was to handle the flurry of frantic phone calls regarding the sale, giving him direct knowledge of the alleged insider trading.

Perhaps it's not unusual for someone his age, but Faneuil seems to be a study in contrasts. Though he catered to the rich and famous, he reportedly made a modest $30,000 a year. And while a tony Manhattan address was de rigueur for the clients he helped Bacanovic serve, Faneuil lived in an understated Brooklyn neighborhood.

Selena Moms, a spokeswoman for Merrill in New York, would not confirm Faneuil's salary. She did, however, say that he worked at the firm for one year as a client associate, a licensed position that allowed him to take orders from clients. In June both he and Bacanovic were placed on paid administrative leave, she says, and after Faneuil pleaded guilty in October, he was fired.

Reached at the home of W magazine society editor Robert Haskell, Faneuil said he couldn't answer questions posed to him by The Advocate. "I am on the other phone with my lawyer," he said pleasantly before hanging up. Haskell has been described variously in news reports as Faneuil's boyfriend or simply as a friend. Still other reports describe him as Faneuil's introduction letter to New York's high society. Haskell did not return calls for comment.

News reports also are fond of portraying Faneuil as a foppish gadabout whose privileged upbringing in a wealthy Newton, Mass., family groomed him for his cushy job catering to the wealthy. But this depiction does not jibe with the picture some friends and acquaintances offer of the young man.

"He was a great kid," says Dean Chronopoulos, owner of Bill's Pizzeria in Newton, where Faneuil worked as a delivery boy for about two years during high school. "I never thought he would be in the business world. I always thought he was going into the arts or the theater. I was surprised to see him in the news."

After high school, Faneuil attended the elite Vermont liberal arts school Bennington College before transferring to Vassar College in Poughkeepsie, N.Y., where he graduated in 1997. At Bennington, a school whose wealthy and quirky student body was made famous by Donna Tartt's 1992 book, The Secret History, Faneuil didn't quite seem to fit in.

"Bennington has a reputation for being a small art school with a lot of strong personalities," says Mikel Wadewitz, a former Bennington student and now features editor for Frontiers, a gay newsmagazine based in Los Angeles. Wadewitz says he met Faneuil at a party in 1993, when he was a junior and Faneuil was a freshman. "He was very nice and very sweet, and he didn't really come across as someone who necessarily belonged there, on first impression."

Similarly, Wadewitz, who also recalls that Faneuil dated the former boyfriend of a friend, is surprised that Faneuil ended up hobnobbing with the rich and famous. "It didn't seem like the type of people I would ever equate him with, and my impression of him [today] is that he is in a little over his head," Wadewitz says. "But then again, maybe a lot has happened in the last five years."

As with the Enron case and Kopper, legal experts say they are not surprised that federal prosecutors went after Faneuil first in the ImClone case. They say the typical strategy is to go after an insignificant player in order to catch the more important figures. "This is how you get all the dominoes to fall," says John Coffee Jr., a professor of criminal and securities law at Columbia University. "Martha Stewart is probably the end-of-the-line target here."

Coffee adds that the plea bargain would likely reduce or eliminate the penalty of a year in prison for a misdemeanor charge. Instead, Faneuil is likely to wind up with probation, community service, a fine, or a combination of all three.

It could be a sobering wake-up call for someone so young and so unversed in the often treacherous ways of big business and high society. And some observers hope it will be a lesson well-taken as well. "We are only human, yet because we are gay and because we know what discrimination feels like on a personal basis, we have the responsibility to do better," Gore says. "If you take the gay piece out of it, you have the old saying--`Of them to whom much is given, much is expected,' and coming from a privileged background [Faneuil] was given much, and so doesn't that heighten the responsibility?"

Quittner also has written for The New York Times and Business Week