Encore: Martha Stewart: The Homemaker Hustler Part 1 | 229

We’ll be back in two weeks with new episodes, but in the meantime, we’re revisiting an episode about one of America’s most famous lifestyle moguls: 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.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Sarah Hagi?

  Audible subscribers can listen to all our episodes of Scamfluencers ad-free right now. Join Audible today by downloading the Audible app.

• 0:08Scaachi Koul?

  We'll be back in two weeks with all-new episodes of Scamfluencers. But first, we're revising a story about someone who continues to stay in the headlines: Martha Stewart. Martha turned 85 a few weeks ago, and she's busier than ever. She recently co-founded an AI-powered management app called Hint, which uses AI to help manage your home maintenance. So if you've ever wanted Martha Stewart to nag you about cleaning your gutters, your dream has come true.

• 0:36Sarah Hagi?

  You know, I don't think I need that, and I don't think I want her to have my data.

• 0:40Scaachi Koul?

  Oh, well, that's not all. Cate Blanchett has been cast to play Martha in an upcoming biopic called Good Thing, named after Martha's famous catchphrase.

• 0:50Sarah Hagi?

  I do think that could be an incredible film, and I think Cate Blanchett will transform.

• 0:57Scaachi Koul?

  While Martha's entire arc is pretty incredible, she went from being the first self-made female billionaire in America to a federal inmate to a Sports Illustrated swimsuit cover model at 81. And now, she's launching tech startups and getting the Hollywood treatment.

• 1:12Sarah Hagi?

  You know, say what you want about her. She is one of one. It's the kind of comeback story that makes you wonder if the scandal even mattered. So with Martha back in the spotlight and about to be immortalized on the big screen, we thought it was the perfect time to revisit how she went from lifestyle queen to convicted felon, and how a stock tip turned into one of the most high-profile white-collar cases of the 2000s.

• 1:36Scaachi Koul?

  So grab your homemade lemon bars and enjoy the encore of part one of our two-part series on Martha Stewart: The Homemaker Hustler.

• 1:50Scaachi Koul?

  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?

• 2:09Sarah Hagi?

  It's complicated, because I do think she has some of the best recipes, and like, they're always going to be good. But also, I have a feeling she's a little bit evil. Okay, you know what?

• 2:19Scaachi Koul?

  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 central to it: a power broker, his lowly assistant, and New York's original pharma bro.

• 2:52Scaachi Koul?

  It's June 25, 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 waspy 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."

• 3:37Scaachi Koul?

  By the look on Martha's face, she does not want to engage. She deflects by telling Jane about the salad they're gonna make. But Jane isn't gonna 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."

• 4:22Sarah Hagi?

  That's exactly how human beings talk when making a chicken salad. Yeah, it makes her look kind of silly

• 4:29Scaachi Koul?

  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."

• 4:54Sarah Hagi?

  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, she will be mocked

• 5:08Scaachi Koul?

  for that phrase for months to come. The New York Post runs the headline, "Martha Salad Days." The Washington Post says, "Stewart Gets Sliced Up." Newsweek describes the 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.

• 5:36Speaker 04

  This message is brought to you by Apple Card. Ah, fall, that cozy season where we swap the swimwear for sweaters and sunnies for scarves. But before the Halloween decorations are put away or Thanksgiving table has been set, there's already holly, jolly music playing in the grocery store, reminding you that the year is coming to a close. Time to kick end-of-year into high gear. When you use Apple Card with Apple Pay, you earn 2% daily cash back on all purchases, including food, decorations, gifts, and more. Get a head start on your end-of-year purchases. Apply for your Apple Card in the Wallet app on your iPhone today and start using it right away with Apple Pay. Subject to credit approval, Apple Card is issued by Goldman Sachs Bank USA, Salt Lake City Branch.

• 6:19Speaker 04

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• 6:22Speaker 06

  I'm Candace DeLong, host of the podcast Killer Psyche. In our latest episode, we go inside the case of Lindsay Clancy, the postpartum psychosis defense, and the stunning mistrial that just reignited a national debate. Listen to Killer Psyche on Audible or wherever you get your podcasts.

• 6:44Scaachi Koul?

  From Wondery, I'm Sachi Cole. And I'm Sarah Haggie. And this is Scamfluencers.

• 6:58Scaachi Koul?

  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.

• 7:24Scaachi Koul?

  Before her name becomes synonymous with the 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.

• 8:07Sarah Hagi?

  Oh, I have seen these before. She definitely has, like, it. And she kind of looks like Rosemond Pike, that actress, a bit? Ooh, yeah, you're right.

• 8:18Scaachi Koul?

  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.

• 8:34Speaker 01

  It gave me a certain self-confidence that a lot of young women lack. And it was a very, very good experience.

• 8:44Scaachi Koul?

  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 tie the knot. Martha actually makes her own wedding dress, because, of course, she does. Martha moves to New Haven, Connecticut, with Andy, who's still got another year left at 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,

• 9:27Scaachi Koul?

  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.

• 9:39Speaker 01

  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.

• 9:48Sarah Hagi?

  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?

• 10:08Scaachi Koul?

  Yeah. Well, Martha was reportedly the only woman at the firm she worked at, but she leaned into it. She says 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.

• 10:26Sarah Hagi?

  Damn, she was really good at it.

• 10:28Scaachi Koul?

  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, rundown 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 homemaking skills her mother taught her as a kid. It's mostly a hobby for Martha, until a couple

• 11:11Scaachi Koul?

  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.

• 11:29Scaachi Koul?

  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 Dressed 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 shtick 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

• 12:13Scaachi Koul?

  guests, they're paying for the illusion that women can do everything.

• 12:18Sarah Hagi?

  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 going to keep finding out the different ways she's a genius. Yeah. This is brilliant.

• 12:37Scaachi Koul?

  Well, Uncatered Affair 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?

• 12:51Sarah Hagi?

  Yes, she says, "I was happy doing parties for 10 or 12, and if it wasn't for 1,000, 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?

• 13:11Scaachi Koul?

  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, 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 Uncatered Affair 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.

• 13:58Scaachi Koul?

  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 Andy's, 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,

• 14:42Scaachi Koul?

  "They had this thing about nepotism."

• 14:46Sarah Hagi?

  That doesn't even sound true. It does not, but okay.

• 14:50Scaachi Koul?

  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.

• 15:13Sarah Hagi?

  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 them how to do that.

• 15:31Scaachi Koul?

  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."

• 16:00Sarah Hagi?

  This is why she is still relevant and still famous. She knows her worth. And yeah, why should she have to feign surprise? She knew what she was doing.

• 16:10Scaachi Koul?

  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.

• 16:20Speaker 01

  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 look at working around the house as housework, I started looking at it as homemaking.

• 16:39Scaachi Koul?

  Throughout the 80s, Martha publishes homemaking 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, later tells People Magazine that Martha belittled and berated her husband,

• 17:21Scaachi Koul?

  and the tabloids are filled with rumors about extramarital affairs. Andy reportedly gets a court 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's 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 biopharma startup. Little does she know, this company is about to become famous, but for all the wrong reasons.

• 17:57Scaachi Koul?

  It's a chilly spring morning in April 1992. A biopharma executive named Sam Waksel is sitting down for a breakfast meeting at an Upper East Side café. He's here to have bagels and orange juice with a renowned cancer researcher. Sam is 44 years old and reed thin. He's got olive skin and 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

• 18:42Scaachi Koul?

  ecstatic. He has a PhD 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 could 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.

• 19:25Sarah Hagi?

  It's so crazy that him making money is such a big factor in this. Like, 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.

• 19:41Scaachi Koul?

  And the truth is, Sam needs money. His company, M-Clone, 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 Etruscan pottery. He hosts monthly salons and star-studded parties there, where the guest list often

• 20:24Scaachi Koul?

  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 M-Clone, 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. He and Alexis broke up a couple of years back, but Sam and Martha are still close. That's weird. Yeah, it is super weird. But here is 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 pharma company and bring it to market. But it's a huge gamble.

• 21:07Scaachi Koul?

  M-Clone 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 rake in a huge fortune. But you don't get to the top without being a little bit of an asshole.

• 21:38Speaker 06

  On January 24, 2023, in Duxbury, Massachusetts, Patrick Clancy called 911. He had found his wife, Lindsay, badly injured, and his three children dead and dying. What followed would become one of the most searing and complicated cases in recent memory, raising hard questions about motherhood, mental illness, and how far our justice system will go to understand what really happened. I'm Candace DeLong, host of the podcast Killer Psyche. In our latest episode, we take you inside the case of Lindsay Clancy, the postpartum psychosis defense, the courtroom battle, and the trial that just ended in a stunning mistrial.

• 22:22Speaker 06

  Follow Killer Psyche wherever you get your podcasts. Audible subscribers can listen to all episodes of Killer Psyche one week early and ad-free right now. Join Audible in the Audible app or by subscribing on Apple Podcasts.

• 22:38Speaker 00

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• 23:20Speaker 00

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• 23:47Scaachi Koul?

  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.

• 24:30Scaachi Koul?

  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 did it" 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

• 24:54Sarah Hagi?

  self-made female billionaire. I actually didn't know that she was the first self-made female billionaire, and this is before people knew billionaires were terrible. I feel like they should have known this.

• 25:05Scaachi Koul?

  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 a Today 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 dished it 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?

• 25:44Sarah Hagi?

  Yeah, she says, "I promise I'll think long and hard before I accept another invitation to your chilly 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 is mean.

• 26:01Scaachi Koul?

  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 for a while, but now she's in another stratosphere. She's filthy rich. She reached the top of the business world, thanks in part 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.

• 26:43Scaachi Koul?

  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 Soho loft 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 Bicanovic is probably here, too. He's in his late 30s with thick blonde hair and a square jaw. His look screams, "I went to prep school," which he did.

• 27:26Scaachi Koul?

  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 dated Sam, Peter went to work for Sam at M-Clone. He was in the marketing department. And now Peter works for Sam in a different kind of way. He's Sam's stockbroker 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's stock options. Martha's own stock portfolio includes a ton of shares of M-Clone, Sam's biopharma company.

• 28:10Scaachi Koul?

  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 Erbitux, 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, "M-Clone 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 M-Clone

• 28:53Scaachi Koul?

  and put in another billion dollars for the marketing rights to Erbitux. And then, right after that, Sam and his brother sold their shares to the pharma giant, netting them $111 million.

• 29:04Sarah Hagi?

  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?

• 29:16Scaachi Koul?

  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 Erbitux. 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 M-Clone'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. Bart's with his close friends Clive Davis and Harvey Weinstein.

• 29:59Scaachi Koul?

  But that's when he gets the news he's been dreading: the FDA is rejecting Erbitux. 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 M-Clone's spiral.

• 30:35Scaachi Koul?

  The day after Sam jets home from St. Bart's, Doug Fennell 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-divorce Ben Affleck. 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. At 9:01 a.m., Doug gets an order to sell tens of thousands of shares in M-Clone. It's from Sam's daughter, Eliza. She cashes out for $2.5 million. And shortly after, he gets another order.

• 31:17Scaachi Koul?

  Sam requests to transfer nearly 80,000 shares into Eliza's Merrill 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 Merrill Lynch's compliance officers, who end up refusing Sam's transfer since he's the CEO of M-Clone, the same company whose stock 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 M-Clone to trend downward, and he says to call him back.

• 31:58Scaachi Koul?

  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 11 a.m., M-Clone's 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 M-Clone and tells him to dump her stock.

• 32:35Sarah Hagi?

  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?

• 32:44Scaachi Koul?

  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 Airtax's application for FDA approval. On Monday, M-Clone's stock plunges 16%, and it keeps going down from there. It all looks really, really bad. And it's about to get the attention of federal investigators.

• 33:20Scaachi Koul?

  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 Wintory, New York, he's staring down two lawyers from the SEC. Peter probably thinks they want to talk about the M-Clone 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 M-Clone stock.

• 34:03Scaachi Koul?

  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.

• 34:44Speaker 05

  Journalist Tristan Redman goes where no son-in-law should ever go. Deep into his wife's family history, digging up the cold case of who murdered her great-grandmother. Because, I should mention, he thinks the murderer might actually be the beloved family patriarch. For the best binge-watch series like Ghost Story, listen to the Audible True Crime Podcast wherever you get your podcasts.

• 35:05Speaker 10

  You stepped out for your morning jog. Except it's not your usual morning jog. You started listening to an epic sci-fi book on Audible. 30 chapters later, you've accidentally run a half marathon. You've lost track of how far you've run, somewhere just past the city limits. You can't stop. You have to find out what happens next. Then it's over.

• 35:25Speaker 02

  The universe seems bigger.

• 35:27Speaker 10

  You feel different. You feel like you have no idea where you are. Audible. Stories that speak to you.

• 35:42Scaachi Koul?

  It's June 2002, about five months after Peter was interrogated by the SEC. Sam has just been arrested by the FBI on insider trading charges. And now, it's all over the news that Martha could be charged next. On the day of Sam's arrest, she puts out an official statement. 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.

• 36:25Sarah Hagi?

  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.

• 36:36Scaachi Koul?

  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 with the help of a Martha impersonator. Take a listen.

• 36:54Speaker 02

  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.

• 37:03Scaachi Koul?

  Martha gets roasted constantly during late-night monologues. Sarah, can you read one of David Letterman's jokes?

• 37:09Sarah Hagi?

  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 get me. It's a good one.

• 37:24Scaachi Koul?

  While late-night hosts aren't the only ones spoofing Martha, her scandal is low-hanging fruit, and New York comedy clubs are eating it up. An Upper West Side 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.

• 37:58Sarah Hagi?

  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?

• 38:20Scaachi Koul?

  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 announces that they have, quote, "begun to see some impact on our 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.

• 39:05Scaachi Koul?

  What was once her billion-dollar strategy now might lead to her downfall.

• 39:12Scaachi Koul?

  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 M-Clone 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.

• 39:57Scaachi Koul?

  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.

• 40:10Sarah Hagi?

  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

• 40:21Scaachi Koul?

  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 subscriptions drop, sales of her Kmart line are down, TV and internet ad sales plummet. The company has no choice but to D. 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.

• 41:06Scaachi Koul?

  In November, Martha Stewart Living Omnimedia announces that its third-quarter earnings have fallen by 42%.

• 41:12Sarah Hagi?

  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.

• 41:30Scaachi Koul?

  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

• 42:14Scaachi Koul?

  media frenzy. For years, Martha has made a career helping people throw dinner parties. And now, she's 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 to our two-part series. Follow Scamfluencers on the Audible app or wherever you get your podcasts. You can listen to all episodes of Scamfluencers ad-free by joining Audible.

• 42:49Sarah Hagi?

  This is Martha Stewart, the homemaker hustler, part one. I'm Sachi Cole. And I'm Sarah Hagi. If you have a tip for us on a story that you think we should cover, please email us at [email protected]. And a reminder that our Scamfluencers 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 Cassandorf, the Vanity Fair article, "Investigating M-Clone," the New York Magazine article, "Who Knew?" by Landon Thomas Jr. and Beth Landman-Kiel, and the book, "The Sell Game: Sam Waksel's Fast Money and False Promises and the Fate of M-Clone's Cancer Drug" by Alex Prudhomme. Grace Barry wrote this episode.

• 43:31Scaachi Koul?

  Additional writing by us, Sachi Cole and Sarah Hagi. Sarah Enni is our story editor and producer, and Eric Thurm is our story editor. Fact-checking by Will Tavlin. Sound design by James Morgan. Additional audio assistance provided by Adrian Tapia. Our music supervisor is Scott Velazquez for Phrason Sing. Our coordinating producer is Desi Blaylock, and our managing producer is Matt Gant. Janine Cornolo and Stephanie Jens are our development producers. Our associate producers are Charlotte Miller and Lexi Perry. Our producers are John Reed, Yasmin Ward, and Kate Young. Our senior producers are Ginny Bloom and Jen Swan.

• 44:04Scaachi Koul?

  Our executive producers are Jenny Lauer-Beckman, Marshall Louis, and Erin O'Flaherty for Wondery.

• 44:17Speaker 03

  I'm Gemma Whelan, and in the new season of The Spy Who, we tell the story of the original femme fatale, The Spy Who Was Mata Hari. A famous dancer turned World War I secret agent, accused of seducing Allied officers to uncover their plans. But was she a temptress or a scapegoat for French failures? Follow The Spy Who now, wherever you listen to podcasts. You can also listen to the full season of The Spy Who Was Mata Hari, early and ad-free on Audible.