Douglas Faneuil, who worked as Peter Bacanovic's assistant, was spared probation and any jail time and instead was fined $2,000. CNNfn's Mary Snow reports on Faneuil's sentencing. Play video (Real or Windows Media)

NEW YORK (CNN/Money) - The former Merrill Lynch employee who gave Martha Stewart the stock tip that led to her conviction earlier this year on obstruction of justice charges will not go to jail for his role in the affair.

Douglas Faneuil, the onetime assistant to ex-Merrill broker Peter Bacanovic, was instead fined $2,000.

Faneuil, who appeared in federal court in New York Friday morning, had faced up to a year in prison for making the late 2001 phone call that allegedly alerted Stewart that her friend Sam Waksal, then the CEO of ImClone Systems, Inc., was dumping his company stock.

Shortly after that phone call, Stewart sold her ImClone holdings. The timing of her sale triggered an insider trading probe of Stewart and Bacanovic.

Stewart, 62, and Bacanovic, 42, were each sentenced last week to 5 months of prison and 5 months of home detention for impeding that 2002 investigation. Both claim the sale was made under a pre-existing arrangement to sell the stock.

Faneuil eventually pleaded guilty to a misdemeanor charge and testified against Stewart and Bacanovic at their trial earlier this year.

At Friday's hearing, Faneuil read a statement in court in which he apologized for his mistakes. "I should have listened to my gut feeling," said Faneuil, his voice breaking. "I am so sorry for all the pain I have caused. Two years later I am a very different man."

Faneuil, who now works for a New York art gallery, also thanked judge Miriam Goldman Cedarbaum for being fair. In addition to keeping him out of jail, Cedarbaum did not order probation either.

Douglas Faneuils heads to court to testify earlier this year.

Cedarbaum, who's presided over the entire case, told Faneuil he has a lot of supporters and called him "very lucky in life."

With Friday's sentencing, the key players charged in the scandal have been sanctioned. But the case is not over.

Stewart and Bacanovic plan to appeal their convictions, a process that legal experts said could take up to 2 years. Cedarbaum ruled last week that they can stay out of prison pending the outcome of their appeals.

In an appearance Monday on CNN's Larry King Live, Stewart said she was considering serving her sentence now in order to put the controversy behind her. In addition to the emotional toll, she cited the financial losses that her home furnishing and arts company, Martha Stewart Living Omnimedia (MSO: up $0.23 to $10.84, Research, Estimates), has suffered since her indictment more than two years ago.

Stewart, however, made it clear that she has not yet made a decision. While she said she does not fear jail itself, she said she fears the prospect of losing her freedom.

It's not surprising that Faneuil got off relatively easy. To his sympathizers, Faneuil, who was 26 at the time the scandal erupted, was a bit player in a story involving players far more powerful than he.

Faneuil testified at trial that Bacanovic told him on Dec. 27, 2001 to call Stewart after he learned that Waksal was trying to sell his ImClone Systems (IMCL: down $0.64 to $66.04, Research, Estimates) stock.

Read the charges • U.S. v. Faneuil • U.S. v. Stewart & Bacanovic • U.S. v. Larry Stewart

Stewart, who was en route to a vacation in Mexico at the time, told Faneuil to dump her stock too, according to Faneuil's testimony.

Faneuil then said Bacanovic and Stewart tried to cover up why Stewart sold. He said he originally went along with the coverup because he feared he would lose his job if he didn't. He said he lied to the Securities and Exchange Commission on two different occasions before his conscience got to him.

Faneuil testified that neither Bacanovic nor Stewart asked him to commit a crime. Stewart, he said, never spoke to him about covering up the stock tip.

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Nonetheless, legal experts considered Faneuil's testimony, in which he also described how rudely Stewart treated him, to be severely damaging to the defense. Other key government witnesses included Stewart's former personal assistant and a friend who traveled with Stewart to Mexico in late 2001.

A third prosecution witness, a Secret Service laboratory director, is facing charges that he lied under oath while testifying in court against Stewart and Bacanovic. While Stewart and Bacanovic failed earlier this month to win a new trial based on the perjury charges against Larry Stewart, no relation to Martha, they are both expected to argue in their respective appeals that his testimony tainted the jury.

Larry Stewart has pleaded not guilty to the charges. His trial is set for September.

The latest on Martha • Martha talks to Larry King • Martha sentenced • Martha broker faces same fate • Presidential pardon for Martha? • An ailing Martha Stewart Living

In another related case, Waksal is now serving more than 7 years in prison after pleading guilty to insider trading. Cedarbaum dismissed at trial a securities fraud charge brought against Stewart.

Faneuil did not make a public statement outside the courthouse following his sentencing Friday. His lawyer, Marvin Pickholz, told CNN last week that Faneuil was working part-time in an art gallery.

Pickholz said Faneuil was looking forward to ending this chapter and getting out of the public spotlight. "[W]alking down the street to get an ice cream cone in August will probably seem like a new kind of treat for him," said Pickholz.