Martin Shkreli, the former hedge fund manager under fire for buying a pharmaceutical company and ratcheting up the price of a life-saving drug, is in custody following a securities probe.
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He announced that month that he was ratcheting up the cost of Daraprim from $13.50 to $750 per pill, stoking outrage.
Federal prosecutors are expected to hold a press conference later today, Thursday, when they will detail the specific charges against Shkreli.
Prosecutors have charged Shkreli with illegally taking stock from Retrophin Inc., a biotechnology firm he started in 2011, and using it pay off debts from unrelated business dealings. He was later fired and sued by the company’s board, which called him “the paradigm faithless servant”. “In the end, Shkreli and Greebel used a series of settlement and sham consulting agreements that resulted in Retrophin and its investors suffering a loss in excess of $11 million”.
US Attorney for the Eastern District of New York Robert Capers points to a chart headed “Shkreli’s ponzi-like scheme”, with members of the Federal Bureau of Investigation and US Securities and Exchange Commission.
Shkreli eventually agreed to lower the price of the drug, but the former hedge fund manager has remained outspoken in the face of intense media scrutiny. In 2012, he took Retrophin public through a merger with a publicly traded shell company. Greebel, 42, was also arrested on Thursday.
Turing and KaloBios declined to comment.
Democratic presidential candidate Bernie Sanders called him a “poster child of greed”, and refused to keep a $2,700 contribution Shkreli made to his campaign.
Turing and Mr Shkreli sparked controversy earlier this year after it reportedly raised the price of Daraprim, a 62-year-old treatment for a risky parasitic infection, to $US750 a tablet from $US13.50 after acquiring it. In January, Retrophin received a subpoena from federal prosecutors in Brooklyn. It acquired old, neglected drugs often used for rare diseases and substantially raised their prices.
They are accused of soliciting investments into two separate funds before misappropriating Retrophin’s assets to pay off Shkreli’s personal and professional debts. “I wouldn’t want to speculate on his reasoning for trying to increase the price on those drugs”, he added.
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The FBI said Shkreli sent fabricated updates to investors for months after the failure of the MSMB fund, touting profits as high as 40 percent. He also flaunted his $2 million purchase of the Wu Tang Clan’s one-of-a-kind album, Once Upon a Time in Shaolin, and then told fans who asked him to leak the album that he hadn’t even listened to it, according to the Daily News.
