On Thursday, Shkreli was arrested by the Federal Bureau of Investigation on charges of securities fraud.
Advertisement
Federal prosecutors with the Eastern District of NY are charging Shkreli with several counts of securities fraud.
The charges predate Shkreli’s time at Turing and Kalo, and occurred when he was a hedge fund manager at MSMB Capital and MSMB Healthcare Management LP, and CEO of Retrophin Inc.
Prosecutors also claim that his outside counsel at Retrophin, Evan Greebel, was also part of the conspiracy.
In 2011, while running the hedge fund MSMB Capital Management, Mr. Shkreli started Retrophin, which adopted a controversial business strategy that has come under scrutiny.
Retrophin said its board removed Shkreli more than a year ago because of serious concerns about his conduct.
A lawyer for Shkreli didn’t immediately respond to a request for comment by Reuters, but Shkreli has previously denied the allegations in the civil suit.
Shkreli and Greebel each face a maximum prison sentence of 20 years if convicted.
In a New York Times profile published this month, Shkreli was labeled the “bad boy of pharmaceuticals”. “This transaction resulted in losses of more than $7 million to the executing broker who had to cover the short position in the open market”, the SEC said. Shkreli, the former hedge fund manager under fire for buying a pharmaceutical company and ratcheting up the price of a life-saving drug, was taken into custody Thursday, Dec. 17, 2015, following a securities probe.
That was a reference to September, when Shkreli gained notoriety after his company Turing Pharmaceuticals raised the price of Daraprim from $13.50 a tablet to $750 after acquiring the drug.
His arrest was not linked to the 5,500-per cent increase in the price of Daraprim, a drug used to treat malaria and infections suffered by HIV-positive people.
In 2014, Martin was ousted from the biotech company amid accusations that he used “company funds to reimburse investors who lost money in MSMB”.
Amid the uproar, Shkreli said Turing would cut the price of Daraprim.
“As alleged in the indictment, Shkreli essentially ran his companies like a Ponzi scheme, where he used each subsequent company to pay off the defrauded investors in the prior company”, Capers said at the presser.
Democratic presidential front-runner Hillary Clinton has previous ripped into Shkreli.
Greebel’s alleged role in facilitating Shkreli’s fraud on Retrophin’s shareholders not only crossed legal boundaries but also grossly violated both his professional and ethical obligations.
Sanders, who advocates a single payer healthcare system to control drug prices, has refused to accept a donation from Mr Shkreli, instead giving the money to a health clinic in Washington, D.C.
Shkreli is accused of siphoning about $US120,000 from one of the hedge funds to pay for food, clothing, rent and other personal expenses.
Advertisement
Shkreli recently made fresh headlines by purchasing an art piece/rap album from Wu-Tang Clan for $2 million, of which there is only one copy.
