Scamfluencers - Martha Stewart: The Homemaker Hustler Part 1

Episode Date: January 8, 2024

Martha Stewart spends decades building her lifestyle empire from the ground up. Her cut-throat business savvy helps make her America’s first self-made female billionaire. But when she becomes embroiled in an insider trading scandal in 2002, it’ll spark a media circus and threaten to muddy her squeaky clean image. A damning investigation by the U.S. government promises to take her down – alongside some of her closest friends.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Hey, Prime members, you can listen to scamfluencers early and add free on Amazon Music. Download the app today. Sarah. Hello. Hey, Sachi. Okay, so a lot of times the people we cover on this show are not household names. But the subject of today's episode absolutely is, I think she might be one of the most famous people on the planet. Sarah, what are your thoughts on Martha Stewart?

It's complicated because I do think she has some of the best recipes and like they're always gonna be good, but also I have a feeling she's a little bit evil. Okay, you know what, that's a good assessment. Well, you might think you know everything about the reigning domestic queen, and I happen to know that you have eaten at her restaurant in Vegas. You talk about it all the time, but trust me, when I tell you, there are so many strange and surprising details in this story, and so many things I didn't know about the saga of her insider

trading scandal, including three people who are essential to it, a power broker, his lowly assistant, and New York's original pharma bro. It's June 25th, 2002, and Martha Stewart stands behind a kitchen counter on the set of CBS's The Early Show. She's 60 years old and dressed in her preppiest pink button up. Her trademark blonde bob is smooth to waspie perfection,

and she looks serene and controlled. The bundle of ingredients in front of her is ready for chopping. On today's menu, potluck salads made with chicken and cabbage. Martha's acting like this is one of her normal weekly appearances on the show, but there's nothing normal about what happens next.

CBS host Jane Clayson joins her on set, and as Martha gets to work on the chicken salad, Jane addresses the elephant in the room. She says, quote, Our good friend Martha Stewart has been in the headlines lately. By the look on Martha's face, she does not want to engage. She deflects by telling Jane about the salad they're going to make. But Jane isn't going to let her change the subject so easily.

So Martha explains what's been going on. She says she's involved in an investigation centering on a pharmaceutical company called Imclone. Translation? She is at the center of an insider trading scandal. But after that, Martha makes it clear that she's done talking about the scandal that has become a source of comedy and fascination for seemingly everyone in America.

She picks up her knife and starts chopping her cabbage, telling Jane, quote, I'm just not at liberty at this time to make comments whatsoever. And I certainly hope the matter is resolved in the very near future. That's exactly how human beings talk when making chicken salad. Yeah, it makes her look kind of silly and unprepared for this media appearance.

At one point, she tells Jane that she's confident that she'll be, quote, exonerated of any ridiculousness. Jane keeps pressing until Martha reaches a breaking point. And through a forced smile, she says, quote, my employees and I are hard at work in making our company the best omnimedia company in the world, Jane. And I want to focus on my salad, because that's why we're here.

Oh my God. Well, Martha, live in reality for a second here. No one's focusing on your salad. No one can even register you're making a salad right now. Okay? Unsurprisingly, But live in reality for a second here, no one's focusing on your salad, no one can even register you're making a salad right now. Okay? Unsurprisingly, she will be mocked for that phrase for months to come.

The New York Post runs the headline, Martha Salad Days. The Washington Post says, Stuart gets sliced up. Newsweek describes a situation in two words, more ridiculousness. And the public takes it and runs with it. I just want to focus on my salad basically becomes a meme before memes are even a thing. It's open season on Martha Stewart. Her particular skillset can be helpful to us. She's a con artist. She's a con. Get me using your talent for crime.

You'll be playing on RT. He's a cop. I need to get off that bone back to being a full-time detective. I need to stay out of prison. They're partners in solving crime. I'm a cop. You're not a cop. You haven't managed?

Not yet. A gun? Soon. Not ever. Wild cards. New series Wednesday. Watch free on CBC Gym. Hello there, Wondry listener.

I'm Sruti Bala, one half of multi-award winning true crime podcast Redhanded. Now if you're looking for a new podcast to keep you going, especially during that weird gap between Christmas and the New Year, why not check out Redhanded? We've got hundreds of hours of episodes to binge, and this year we covered everything from the Idaho student murders to Lucy Letby. Recently, we even did a live shorthand episode. Shorthand is our mini-show exclusive to Wondry, and we did this with the UK's favourite agony art. La la la let me explain, and it was all about Hybristophilia, or in other words,

being massively attracted to violent criminals. Christmasy? Probably not. Interesting? Absolutely. So this year why not snuggle up next to the fire, be an off those so-called Christmas classics, and listen to the dole-set tones of your two new favourite podcasters, Red Handed. As we tell you all about something, as far from Christmassy as you can imagine. From Wondery, I'm Sachy Cole, and I'm Sarah Haggi. And this is Scamful Inswers. Our two-part series on Martha Stewart is about how a woman from a middle-class family in

New Jersey ended up becoming America's first self-made female billionaire. But it's also about the value of women's work, the shifting nature of celebrity over the 2000s, and the most American scam of all, obscene wealth. This is Martha Stewart, the Homemaker hustler, part one. Before her name becomes synonymous with a brand, Martha is just a kid growing up in New Jersey in the 40s. She's the second oldest of six children in a middle-class Catholic family. Both of her parents are teachers, born to immigrants from Poland.

And Martha later says that her mom taught her everything she knows about gardening, sewing, cooking, and entertaining. And Martha takes to it right away. Her mom later recalls that Martha's first catering event was cooking breakfast for her high school football team. Martha's also got an entrepreneurial streak. She babysits for 50 cents an hour, and when she gets scouted to model at 15, she goes for it, and listen, she can model. Sarah, I want you to look at these photos of young Martha.

Oh, I have seen these before. She definitely has, like, it. And she kind of looks like Rosemond Pike, that actress, oh, yeah, you're right. Yeah, she's gorgeous. Martha gets a scholarship to Barnard College where she studies history and architecture, but she keeps modeling on the side.

It helps pay for her living expenses, and it also gives her something money can't buy. Here's what she says in an interview with Fresh Air, years later. It gave me a certain self-confidence that a lot of young women lack, and it was very, very good experience. It must be with that confidence that Martha says yes to a blind date with Yale Law student

Andy Stewart. She's just 19 and she's never had a boyfriend. She and Andy quickly fall in love and she later says that Andy desperately wanted to get married. So, a year later, in 1961, they tied the knot. Martha actually makes her own wedding dress because, of course she does. Martha moves to New Haven, Connecticut with Andy, who still got another year left to Yale. But Martha's still at Barnard, so she commutes nearly four hours on the train to Manhattan and back. Two years after she graduates, she gives birth to a

daughter named Alexis. But Martha has no plans to become a stay-at-home mom. Andy is getting his career off the ground as a lawyer, and Martha is determined to make a name for herself as well. So she heads to Wall Street and finds a job as a stockbroker. Years later, she talks to Barbara Walters on 2020 about what attracted her to the gig. I found it very exciting. I was fascinated with companies and the way they developed and built their businesses. You were good. Yes, I was good. That is pretty crazy because I know that, you know, even as recently as the 2000s, it's not very common to have a woman try and take on that job. No.

And I think people don't know that Martha used to do this, right? Yeah. And you know what? Props to her for being like, yeah, this is something I want to do. I'm going to try it. Why not? Yeah. Well, Martha was reportedly the only woman at the firm she worked at.

That she leaned into it. She said she sported velvet hot pants to work and kicked her feet up on the desk. She reportedly makes six figures a year by the early 70s, which would be more than a million dollars in today's money. Damn, she was really good at it! She's rich, bitch. In 1971, when Martha is 30, she and Andy decide to buy a property in the wealthy suburb of Westport, Connecticut.

The town is home to celebrities like Paul Newman and Joanne Woodward, but Martha's property isn't that glamorous, at least not at first. It's an old, run-down farmhouse on a former onion farm. It was built in 1805 and it needs a ton of work, but Martha sees potential. She throws herself into renovating the property, which later becomes known by its street name, Turkey Hill.

It's a big project, but it's also fun and challenging. And most of all, it lets Martha reconnect with the home-making skills her mother taught her as a kid. It's mostly a hobby for Martha, until a couple of years later when the stock market tanks. Martha takes the downturn hard. She doesn't like losing. So, she ditches Wall Street and decides to go all in on the business of entertaining. And despite all odds, Martha will find that homemaking is where the real money is.

It's the mid-70s and Norma Collier has teamed up with her longtime friend Martha to start a catering business. Norma is thin and tall with shoulder-length brown hair. She and Martha were models back in the day. They met when they were both named best-stressed college girls in America by Glamour magazine. Now, they're both working mothers

and they know how hard it is to juggle a career, parenthood, and a social life. So they decide to cater their business to women who want to look like they have it all, but don't actually have time to cook. They call it the uncatered affair. Their stick is that they do all the cooking and decorating behind the scenes of a party, while making it look like the host did all of it herself.

Their clients aren't just buying the extravagant meals for their guests, they're paying for the illusion that women can do everything. Honestly, this is so genius. It's so smart. It's like such a good idea. It's crazy. It took that long to come up with it even for the time. From the moment this episode began,

I'm like, Martha Stewart is a genius and I'm gonna keep finding out the different ways she's a genius. This is brilliant. Well, Uncater to Fair starts out small, catering dinners for a dozen or so guests. But as the business gets more popular, Norma and Martha start having disagreements about how they want to grow. Sarah, can you read what Norma later tells New York magazine? Yes, she says, I was happy doing parties for 10 or 12, and if it wasn't for 1000,

it wasn't good enough for Martha. I mean, I don't think either of them are wrong, but it's just, you know, she was happy having this kind of normal business. And Martha clearly had what we call now a growth mindset, you know. Yeah, man, listen, she's a shrewd capitalist. She's not going to do nothing for nothing, you know? Well, one day, Norma's at Martha's turkey hill estate, prepping for a catering gig. And when she rounds the corner into the kitchen, nothing for nothing, you know? Well, one day, Norma's at Martha's Turkey Hill estate prepping for a catering gig.

And when she rounds the corner into the kitchen, she overhears Martha talking in hushed tones. According to Norma, Martha tells Andy, quote, I deserve to keep more than her because I work harder and I'm more talented. But Norma doesn't take that line down. She says that she walks right into the kitchen

and tells Martha that she'll finish working this party, but after that, she's done with her partnership. Martha takes uncareder to fare over and she rebrands it under her name. Now that she's the one in charge, her ambitions are free to extend far beyond Connecticut kitchens. She's about to go from housewife to household name.

Martha's company takes off fast, attracting a list clients with big appetites and even bigger bank accounts. It helps that her neighbors in Westport include celebs like Robert Redford and Ralph Lauren, and they all hire her to cater their events. Her husband Andy is now working as a publishing executive, and she leverages those connections too.

One night in 1980, his company is throwing a big deal book party in New York City, and her company gets hired to cater the event. She does such a good job that another publishing executive at the party, a friend of Andes, takes notice. He asks Martha if she's ever thought about publishing a cookbook. It turns out Martha has. But she later tells the Miami Herald that she couldn't publish the book with Andy's company because, quote, they had this thing about nepotism. That doesn't even sound true. It does not, but okay. Well,

shortly afterwards in 1982, Martha's first book is published. It's called entertaining, and it's unusual for the times. It's expensive, in part because Martha insisted that all the photographs be in full color. And the book has more than just recipes. It also has tips on table setting and decorating for everything from a romantic dinner for two to an at-home wedding. Here, look at the cover. The cover is obviously dated, but it's beautiful. It's very bright and vivid.

It's Martha at a dinner table, getting ready to host, and she looks gorgeous, and she's wearing white. And everything just looks so safe and aspirational, you know? You're like, I would trust her to tell me how to do that. Yeah, I would too. Well, when the book comes out, Martha spends a month on the road, giving interviews and cooking demonstrations across the country. The first printing of 25,000 copies sells out immediately, and the publisher reprints another 50,000.

Entertaining is a massive hit. No one could have predicted it, except Martha. She later tells New York Magazine, quote, I didn't not expect it to be a hit. That was the funny thing. And I think that sort of bothered people. This is why she is still relevant and still famous. She knows her worth.

And yeah, why should she have to have famed surprise? She knew what she was doing. Well, Martha later tells Barbara Walters that the book wasn't just about cooking or even about entertaining. It was about entirely rebranding what it meant to be a housewife. I think it was to make housewives, homemakers, understand that what they were doing on a daily

basis was something to be commended, applauded, looked at with happiness. Rather than looking working around the house's housework, I started looking at it as homemaking. Throughout the 80s, Martha publishes home making and cooking guides on everything from holidays and weddings to quick and easy dinners. But books are just the beginning. She launches a newsletter, sells a line of cookware by mail, and even hosts monthly seminars at Turkey Hill. The three-day lectures cost $900 to attend, and this does not include lodging. But while Martha's business is booming, her marriage is floundering. In 1987, as she prepares to release her fifth book in as many years,

Andy drops a bombshell. He's leaving her. Reportedly, things have been bad for a long time. Norma, Martha's former business partner, leader tells People Magazine that Martha be little and berated her husband, and the tabloids are filled with rumors of an extra marital affairs. Andy reportedly gets a quarter-order barring Martha from speaking to him. And after a long separation, Martha and Andy divorce in 1990, the same year that Martha launches her signature magazine, Martha Stewart Living.

Messy divorce, notwithstanding, Martha is well on her way to building a media empire. And as she continues to amass wealth, she becomes an avid investor, including in a friend's biofarmist startup. Little does she know, this company is about to become famous for all the wrong reasons. It's a chilly spring morning in April 1992. A biopharma executive named Sam Waxel is sitting down for a breakfast meeting at an upper east side cafe. He's here to have bagels and orange juice with a renowned cancer researcher.

Sam is 44 years old and reed then. He's got all of skin in a receding hairline. He looks a little bit like Matt Lauer and Larry David melted together. Sam is the CEO of a company called Imclone, which he founded with his brother about seven years earlier. His job involves taking lots of meetings with doctors and researchers. He's always on the hunt for new medical breakthroughs that he can then develop and sell as pharmaceuticals.

So, when the researcher he's meeting with starts telling him about a particular molecule that can shrink malignant tumors, Sam is ecstatic. He has a Ph.D. in immunology so he understands the research and immediately sees its potential. If he can find a way to harness this molecule, he thinks it can revolutionize cancer treatment. It's a cause near and dear to his heart. His parents are both Holocaust survivors and he often cites their resilience as his inspiration in life. He wants to help end human suffering.

The researcher explains that he's only tested the treatment on mice. It needs to be tested on humans, and then put through extensive trials before it can get FDA approval. He tells Sam that he needs a businessman to handle all of this. And Sam is eager to move forward, but not just because he thinks this treatment could

help cancer patients. He also sees dollar signs. It's so crazy that him making money is such a big factor in this. He could say it's to help people and make the world a better place, but ultimately, if this works, he will be filthy rich and that is so sad. Yeah, if you think about it too long, it gets super gross. And the truth is, Sam needs money. His company, ImClone, is struggling.

Its biggest initiatives so far have been flops. There was a DNA probe technology, a vaccine for hepatitis C, and an AIDS drug that all went nowhere. The company's gotten by on strategic partnerships with drug companies, infusions of cash from venture capitalists, and an IPO last year that raised more than $30 million. Sam has made a ton of money, but he also has a habit of spending it extravagantly. His 5,000 square foot loft in Soho is filled with museum quality art, including a Rothko and a rare collection of atruskin pottery.

He hosts monthly salons and star-studded parties there, where the guest list often includes his good friend, Martha Stewart. They've known each other ever since they met at a charity event she catered in the early 80s. When Sam started Imclone, Martha became one of its first investors. And they grew even closer when Sam started dating Martha's daughter, Alexis, who is not much older than his own daughters. Ian Alexis broke up a couple years back, but Sam and Martha are still close.

That's weird. Yeah, it is super weird, but here's Sam and he needs a win, so he decides to go all in on this molecule. He fronts the money to license and develop it into a drug. And the goal is to sell it to an even bigger farmer company and bring it to market. But it's a huge gamble. Imclone has no clinical experience, no manufacturing capability,

and has never taken a drug through the FDA approval process. But Sam won't let any of that stand in his way. He's sitting on a miracle drug and he's ready to cash in. Meanwhile, Martha is about to return to her stock market roots and break in a huge fortune. But you don't get to the top without being a little bit of an asshole. Hey everybody, I'm James. I'm Jimmy. You definitely want to hear us on Small Town Murder, our crazy podcast about murder and Small Towns. Pretty happily named. And what do you think of when you think of a small town? Oh, um, terrifying, terrifying murder. Exactly. Yeah, so you know, and that's what we have for you. It's a shock full of it every week. We have two episodes a week, one regular on Thursdays and one express a little shorter

episode on Fridays where you're going to hear the craziest stories from small towns. We'll talk a little bit about the town to give you a setting and then we'll get into some of the wildest, craziest murders you've ever heard of mixing in some humor here to cut the dark. Keep it light. Just a little bit and keep it light. You definitely want to join us there twice a week. You can't be to come and join a small town murder podcast.

Subscribe today. Follow small town murder on the Wondery app or wherever you get your podcast. You can listen to small town murder early and add free right now on Wondery Plus. Being an actual royal is never about finding your happy ending, but the worst part is, if they step out of line or fall in love with the wrong person, it changes the course of history. I'm Aresha Skidmore Williams, and I'm Brooke Sifrin. We've been telling the stories of the rich and famous on the hit Wondery Show, even the

rich, and talking about the latest celebrity news on Rich and Daily. We're going all over the world on our new show, Even the Royals. We'll be diving headfirst into the lives of the world's kings, queens, and all the wannabes in their orbit throughout history. Think succession meets the crown meets real life. We're going to pull back the gilded curtain and show how royal status might be bright and shiny, but it comes at the expense of, well, everything else.

Like your freedom, your privacy, and sometimes even your head. Follow Even The Royals on the Wondery app or wherever you get your podcasts. You can listen to Even The Royals early and add free right now by joining Wondery Plus. It's 1999, about seven years after Sam first learned about the cancer drug, and Martha is at the New York Stock Exchange. She's sporting an Oso 90s short blonde bob and a navy blue blazer. She's standing on the balcony podium overlooking the trading floor, and she's surrounded by the nearly all-female executive team of the company she founded just two years earlier.

It's called Martha Stewart Living Omnimedia, and it's the corporate umbrella for Martha's ever-expanding media empire. It includes her magazine, Martha Stewart Living, a cable TV show of the same name, and tons of merchandise. When Martha rings the opening bell to begin trading, the room erupts in applause.

Martha Stewart Living Omnimedia has officially gone public. Martha bursts into a big toothy smile. This is not the smile she gives TV audiences, or wears on the cover of her magazine. This is a geeked-out, ear-to-ear, I fucking didit smile. Shares open at $18 a pop and triple in value before closing. Martha owns a 70% stake in the company,

which makes her, at least on paper, America's first self-made female billionaire. I actually didn't know that she was the first self-made female billionaire, and this is before people knew billionaire's were terrible. I feel like I should have known this. I know, and she's been working her ass off to get to where she is today.

And it sure seems like her employees feel that intensity, working for her means anticipating her every need or unleashing her wrath. She's gained a reputation as an ice queen and a taskmaster. One rumor is that she slapped today's show staffer because she didn't like the design set of her segment. Her former gardener sued her for withholding overtime pay. She eventually triumphed against him in court.

She even disshed out to fans. After she was criticized for leaving a Buffalo New York charity event without signing all of the books she sold, she sent a letter to the local paper. Sarah, would you like to read from it? Yeah, she says, I promise I'll think long and hard before I accept another invitation to your chili and downright unfriendly city again. Martha, iconic! I'm like, yeah, that's kind of how I see her, and that's why

she's successful. She's successful because she's mean. Well, to Martha, it seems like that's just the cost of running an empire, especially as a woman with something to prove. She later tells People Magazine, quote, even my own lawyers were negative about the possibility of success. I remember one lawyer sending me an orchid saying, oh, you did it. Wow, what a surprise. Martha has been uber wealthy foralt-fee for a while, but now she's in another stratosphere.

She's filthy rich. She reached the top of the business world thanks and parked to her perfectionism and her obsessive attention to detail. But it's that habit of sweating the small stuff that's about to turn her dream life into a waking nightmare. It's December 2001, about two years after Martha Stewart living omnimedia went public. It's been a somber and anxious fall in Manhattan in the wake of 9-11, and Sam is eager to blow

off some steam. Luckily, his annual Christmas party is the perfect place to do just that. Tonight, his so-ho-loaf is filled with famous faces. There's real estate and publishing magnate Mort Zuckerman, future governor and serial creep Andrew Cuomo, Mick Jagger of the Rolling Stones, and the biggest celebrity of all. Martha Stewart. Martha's good friend Peter Becanovic is probably here too. He's in his late 30s with thick blonde hair and a square jaw. two. He's in his late 30s with thick blonde hair and a square jaw. His look screams, I went to Precipble, which he did. He was raised in New York City by a doctor and a banker,

immigrants from Serbia and Greece. By the time he went to Columbia University in the 80s, he was in the same elite social circle as Alexis Stewart, Martha's daughter. She went to Barnard, just like Martha. In the early 90s, not long after Alexis stated Sam, Peter went to work for Sam at Imclone. He was in the marketing department. And now Peter works for Sam in a different kind of way. He Sam's stock broker at Merrill Lynch. But Martha is hands down his most famous client.

Peter handles her pension, her personal accounts, the company's 401k plan, and even the employee stock options. Martha's own stock portfolio includes a ton of shares of Imclone, Sam's biofarmac company. The stock has been doing extremely well because the drug that Sam's been developing is being hailed as a game-changing cancer treatment. It's now known as AribaTox, and it's gotten a ton of attention ever since being granted fast track status by the FDA earlier that year. All of this has translated into a ton of hype and inflated stock prices.

Erbitux has become so buzzed about that it even landed on the cover of Business Week over the summer. The headline read, Imclone may have a cancer blockbuster. Sam and his brother capitalized on all the good press by borrowing more than $30 million from their company to buy up shares of its stock. Then, two months later, a major pharma company bought a billion-dollar stake in Imclone and put in another billion-dollar for the marketing rights to Airbatux. And then right after that, Sam and his brothers sold their shares to the pharma giant, netting them $111 million. So, this is all based on nothing actually happening in terms of this drug working. This is all based on talk and potential and what people think might happen, right?

Yeah, it's all a little nebulous, but Sam is harboring a secret. Two days before the party, he and his brother got word that the FDA was having its doubts about air betucks. It's not an official no, but it's not a good sign. Sam knows that if the drug doesn't get approval by the FDA, it won't be allowed to go to market, which means Imclone's stock will take a major hit, and so will everyone who owns shares of it, including him and Martha. Sharing information about the stock is technically illegal. It could amount to insider trading, so Sam keeps quiet and keeps the party going.

He spends Christmas vacationing on a resort in St. Barth's with his close friends, Clive Davis and Harvey Weinstein. But that's when he gets the news he's been dreading. The FDA is rejecting air betucks. Turns out its clinical trials had some serious flaws. Sam is devastated. The cancer treatment he spent nearly the last decade working on might never see the light of day.

And because he and his inner circle have invested in it, they could all lose a fortune. He's got some serious damage control to do. So the day after Christmas, he rushes back to New York on a private jet. He needs to save his company and his family from ruin. But he's not the only one about to get caught up in Imclone Spiral.

The day after Sam jets home from St. Barrett's, Doug Fenuel is stuck in the office. Doug works at Merrill Lynch as Peter's assistant. He's a 26-year-old vassar grad from Newton, Massachusetts. He has a baby face, a cleft chin, brown hair, and dark brown eyes. He resembles a young, pre-divorist band athlete. Doug is manning Peter's desk while he's in Miami.

And even though it's the notoriously sleepy week between Christmas and New Year's, things in the office are moving. And I know when I am, Doug gets an order to sell tens of thousands of shares in Imclone. It's from Sam's daughter, Eliza. She cashes out for $2.5 million. And shortly after, he gets another order. Sam requests to transfer nearly 80,000 shares into Eliza's Meryl account for another sale. This looks really suspicious to Doug, but he's just the assistant. So he calls Peter who agrees.

Something fishy is going on. Peter calls in Meryl Lynch's compliance officers who end up refusing Sam's transfer since he's the CEO of Imclon, the same company who stalks he's now trying to sell. Then Doug later claims that Peter says, out of nowhere, oh my god, we have to call Martha. Doug and Peter try to get Martha on the phone, but she's on vacation in Mexico. So Peter leaves a message.

He says he expects Imclone to trend downward, and he says to call him back. Doug says that Peter then tells him that when Martha calls back, he is supposed to fill her in. When Doug asks whether that means to fill her in on Sam trying to dump his shares, he says Peter tells him, quote, that's the whole point. By 11am, Imclone Stock has sunk to $60.

That's a 20% drop from the day of Sam's Christmas party. And then, less than three hours later, Doug gets a call. It's Martha. She asks Doug what the hell is going on? And he tells her about Sam trying to sell. Martha then asks the current market price for Imclone and tells him to dumb her stock. I mean, clearly a lot of what's been going on so far

has been in this like legal gray area, but this is when they're really doing the illegal insider trading, right? Yes, crimes are happening. Doug has never been a huge fan of Martha's. She's always kind of been a jerk to him, but Peter's on vacation and it's Doug's job to process his client's stock trades, so Doug follows her instructions. A day after the trade on a Friday afternoon, the FDA officially rejects AirBetux's application for FDA approval. A Monday, Imclone Stock plunges 16 percent, and it keeps going down from there.

It all looks really, really bad. And it's about to get the attention of federal investigators. Just a few days after Martha's trade, Peter sits in a conference room under harsh fluorescent lights. I imagine he's still got a tan from his holiday trip to Miami, but now, back in Winters in New York, he's staring down two lawyers from the SEC. Peter probably thinks they want to talk about the Imclone trades he made on behalf of his client, Sam.

He's prepared to talk about it. But then, the investigators catch him off guard. They tell him they're also looking into the trades made by one of his other clients, Martha Stewart. This is where Peter's palms must get a little clammy. He knows his professional reputation depends on protecting Martha's, which is exactly what he does. First, he denies telling Martha that Sam had dumped his imclone stock. Second, Peter says that he sold Martha's stock because she'd previously instructed him to dump it if it dipped below a certain value.

And third, Peter insists that he was the one, not Doug, who spoke to Martha on that day and arranged the sale. Martha sticks to the same story when it's her turn to be interrogated, but investigators aren't going to accept her account as the truth. The irony is, she's in this huge mess for dumping stocks that really only saved her about 45 grand, which for a billionaire is the equivalent of finding change between couch cushions. And this chump change is going to cost her more than she ever could have imagined. The holidays usually include hours on planes, cars, trains, flying baby next to you, put

on those noise-counseling headphones. Mom and dad arguing about directions in the car, air pods in. No matter how you listen, we have the perfect headphones on distraction. A new season of the critically acclaimed Dr. Death Podcast is back with a story of miraculous cures, magic, and murder. When a charismatic hot shot doctor announced revolutionary treatments for cancer and HIV, it seemed like the world had been given a miracle cure. Medical experts rushed to praise Dr. Serhad Gumbu as a genius.

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She says she didn't have any insider information and that she sold her stocks legally. But her denial doesn't do much to quiet the press. They're in an absolute frenzy over the idea that Martha could potentially go to prison. So when she appears for her regular cooking segment on CBS's early show, it's not surprising that she ends up getting grilled.

But Martha shuts down. This is the moment, remember, when she says she just wants to focus on her salad. I feel like seeing the series of events unfold this way is making it clear to me that when she was making that salad, I don't think she thought she was going to get into actual trouble. No, probably not. Because Martha's handling the media circus the same way she handles everything in her life, with white knuckle control, but her

approach completely backfires. A few days later, Conan O'Brien mocks the salad incident on his late night show, but the help of a Martha impersonator. Take a listen. Okay, what about your calls to your friends, warning them to dump their stock? Well you don't want to dump too much in your stock, chicken is good of course, and onions. Martha gets roasted constantly during late night monologues. Sarah, can you read one of David Letterman's jokes? Yeah, he goes, what a beautiful day in New York today.

Isn't it fantastic? Here's how lovely it was today. Martha Stewart was doing her insider trading outside. You know what? That gets me. Jokes like that getting good. It's a good one. Well, late-night hosts are the only one spoofing Martha.

Her scandal is low-hanging fruit, and New York comedy clubs are eating it up. An upper Westside club even put together an entire show about the scandal. People are thrilled to watch Martha Stewart fail. There's a feverish glee and giddiness to it all. Cheeky, verging on bitchy headlines are all over the press that summer. Like, Martha Stewart's to-do list may include some image polishing. A parody magazine cover called Martha Stewart Living Behind Bars makes the rounds online. Here, take a look at this photo of it.

I mean, this is great. This really takes you back to a more innocent time where there was no real social media. Like, you know, these cycles lasted for so much longer because the only way you were seeing the jokes is if you were watching TV or reading the news. Yeah. And you know, I feel like after 9-11, America deserved this, you know? Well, you're right. Making fun of Martha becomes its own mini-economy, and it is booming. But Martha's bottom line is falling fast.

In July 2002, about a month after her disastrous salad chopping appearance, Martha Stewart living announced that they have, quote, begun to see some impact on her business. Despite the jokes, Martha remains quiet. Her business empire relies on presenting a flawless image. So in the heat of the scandal, Martha's strategy is to stay composed, stay in control, and say next to nothing. But the celebrity scandal script is evolving, and Martha is not changing with it.

Her refusal to admit to her flaws once felt aspirational, but now it feels old school and wildly out of step. What was once her billion dollar strategy now might lead to her downfall. It's mid-August, 2002, and the scandal has shown no signs of cooling. I imagine Martha is in a Manhattan boardroom meeting with her lawyers. Probably a dozen white guys wearing $4,000 suits, and they're preparing to send a bunch of documents to congressional members who are looking into whether Martha committed insider

trading. They say her actions warrant an investigation into, quote, misbehavior by corporate insiders. And since she won't agree to an interview, they're demanding all of her phone and email records relating to her imclone trade. And Martha complies, sort of. Her lawyers have redacted huge swaths of the records they send to Congress. The whole thing is practically unreadable. And the committee's investigators are, understandably, pissed off. So the Commerce Committee asks Martha to come in front of Congress and testify. But Martha's done talking. Her lawyers make it very clear that she'll plead the fifth

for every question. And Sarah, I am so angry that we never got to see this happen. I know. Could you have imagined the power in that room of her just declining to answer any question? My personality would still be built off of that today if we ever got to see that. Well, Martha's lawyers eventually do deliver the unredacted documents to Capitol Hill, but her refusal to testify has made them suspicious as hell. Eventually, the committee shuts down its investigation, saying they've taken it as far as they can. But they're not done with Martha. They ask the Justice Department to look into whether Martha lied to Congress. Her stubborn silence is not helping. And at the same time, her brand is tanking. Martha Stewart living subscription's drop,

sales of her cameart liner down, TV and Internet ad sales plummet. The company has no choice but to de-Martha Martha Stewart's company. They even roll out a new publication called Everyday Food, which is basically Martha Stewart Living just without Martha on the cover. In November, Martha Stewart Living Omnimedia announces that its third quarter earnings have fallen by 42%. I feel like if this were to happen right now, the way culture is and the way announces that its third quarter earnings have fallen by 42%. I feel like if this were to happen right now, the way culture is and the way the internet works, you would have seen sales skyrocket.

Like it would have catapulted her to something else. Like it's really interesting to see how this really did affect her career very negatively. Yeah. But I have to imagine that what really twisted the knife in Martha's gut was when the company cancels her annual holiday special that year. At this point, no one can stop talking about Martha Stewart. In June of the following year, Martha goes to her attorney's office in Manhattan. They put Justice Department lawyers on speakerphone and they offer her a deal.

It would require her to plead guilty, but it's her best chance at avoiding jail time. Martha asks for time to consider it, and that night she comes to a decision. She's turning it down. The next day, her lawyers bring her back into the office and try to get her to reconsider. They reportedly tell her that she'll never get a better deal, and turning it down means she'll have to go to trial, which will create an even bigger media frenzy. For years, Martha has made a career helping people throw dinner parties. And now she set the table for the most unpleasant event

of her life, a big, messy, federal trial. Afterwards, she'll be faced with her most serious redecorating challenge yet, her own reputation. That's next time in the finale toward two-part series. Hey, Prime members, you can listen to ScanFluencers ad-free on Amazon Music. Download the Amazon Music app today, or you can listen ad-free with Wondery Plus and Apple podcasts.

Before you go, tell us about yourself by completing a short survey at Wundery.com slash survey. This is Martha Stewart, the Homemaker Hustler Part One. I'm Sachi Cole, and I'm Sarah Haggi. If you have a tip for us on a story that you think we should cover, please email us at scamfulinsersatwundery.com and a reminder that our scamfulensers' merch store is live at WonderyShop.com.

We use many sources in our research. A few that were particularly helpful were the New York Magazine article living with Martha by Jeannie Cassendorf. The Vanity Fair article investigating Imclone, the New York Magazine article who knew by Landon Thomas Jr. and Beth Landman Kiel, and the book The Cell Game, Sam Waxel's Fast Money and False Promises, and The Fate of Imclone's Cancer Drug by Alex Prudum.

Grace Barry wrote this episode, Additional Writing by Us, Sachi Cole and Sarah Haggy. Sarah Enny is our story editor and producer and Eric Thurm is our story editor. Fact checking by Will Tavlin, sound designed by James Morgan. Additional audio assistance provided by Adrian Tapia. Our music supervisor is Scott Velasquez for Frazon Singh. Our coordinating producer is Desi Blaylock,

and our managing producer is Matt Gantt. Jeanine Cornelo and Stephanie Gens are our development producers. Our associate producers are Charlotte Miller and Lexi Piri. Our producers are John Reed, Yasmin Ward and Kate Young. Our senior producers are Ginny Bloom and Jen Swan. Our executive producers are Jenny Lauer, Beckman, Marshall Louis, and Erin O'Flarity for Wondry. Wondry.

Wondry. Wondry. Wondry. Wondry. Wondry. Wondry. Wondry. Wondry.

Hey, I'm Michelle Beato. And I'm Peter Rosenberg. Hey, Peter. Tell the people about our new podcast. Right, it's called Over the Top. And we cover the biggest topics in sports and pop culture, using Royal Rumble rules. That means we'll start with two stories.

Toss one out on its ass, and dive into the other stories with ruthless aggression. Oh, but it never stops because every 90 seconds after that. stops because every 90 seconds after that. While God whose music is that another story comes down to the ring. Rinse and repeat until we arrive at the one most important thing on planet Earth that week. Follow over the top on the one-dream app or wherever you get your podcasts. you can listen to over-the-top ad-free right now by joining OneDrew Plus.

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