According to Brooklyn U.S. Attorney Robert Capers the entrepreneur had been running the Companies on a Ponzi scheme whereby he ended up using the assets of Retrophin to pay off debts all to hide the fraud. As charged, Martin Shkreli targeted investors and retained their business by making several misrepresentations and omissions about key facts of the funds he managed.
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Shkreli, the chief executive of the company, specialises in buying patents on low-cost drugs and then hiking their price.
Congress has also launched investigations into Shkreli’s role in Turning Pharmaceuticals’ controversial price hike of Daraprim, a drug used to treat an infection commonly diagnosed in AIDS patients.
The FBI said he was targeted instead in an $US11 million ($15.5 million) embezzlement probe at another company he once led, Retrophin.
Shkreli defended the increase by saying that insurance and other programs would enable patients to get the drug and that the profits would help fund research into new treatments.
People also noted how ironic it was that Shkreli recently said he wanted to bail out rapper Bobby Shmurda, who’s in jail on charges of conspiracy to commit murder – among other things.
He committed “fraud in almost every aspect of hedge-fund investments and in connection with his stewardship of a public company”, said the director of enforcement at the Securities and Exchange Commission, Andrew Ceresney, at the news conference.
Republican White House hopeful Donald Trump called Shkreli “a spoiled brat” and Bernie Sanders returned a donation from him.
With a mix of fresh marketing and pricing of unchanged drugs and efforts to develop improved versions of older drugs, Shkreli recast himself as both a Wall Street wizard and a medical pioneer. On Twitter, they wrote, “no seizure warrant at the arrest of Martin Shkreli today, which means we didn’t seize the Wu-Tang Clan album”, meaning “Once Upon a Time in Shaolin” is probably still in Shkreli’s home.
Martin Shrkeli, 32, was charged with security fraud related to the time he spent in Retrophin, a pharmaceutical company, which he founded.
Leading pharmacy chain Walgreens Boots Alliance, now the exclusive USA supplier of Daraprim, said it has inventory of the drug, which has a list price of $750 per dose. “We’re not aware of where he got the funds that he raised to buy the Wu-Tang Clan album”. After his arrest, its stock fell by more than half Thursday before trading in the company was suspended.
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Retrophin, which said in a statement that it had fully cooperated with the government investigations of Shkreli, was down 1.2 percent at $21.10 in the early afternoon.
