A spokesman for Martin Shkreli (SHKREHL’-ee) says the pharmaceutical company executive denies the securities fraud charges he’s facing and “expects to be fully vindicated”.
Advertisement
The securities fraud investigation predated the controversy surrounding Shkreli since September, when reports surfaced that his privately held Turing had raised the price of Daraprim, a 62-year-old treatment for a unsafe parasitic infection, to $750 a tablet from $13.50 after acquiring it. The charges were instead related to his actions at another pharmaceutical company Retrophin, which he ran as CEO up until previous year.
Authorities believe that Shkerli used Retrophin’s stock to repay millions in losses that he generated while running the hedge fund. Prosecutors are alleging that he did so by making secret payoffs to former investors and disguising them as “consulting arrangements”.
US Attorney Robert Capers said that Shkreli engaged in multiple schemes to defraud investors which included securities fraud and conspiracy.
The images of Shkreli’s arrest – in a grey hoodie to boot – delighted some Twitter users.
The FBI’s NY office said on Twitter that agents did not seize Mr Shkreli’s album.
Shkreli, the chief executive of the company, specialises in buying patents on low-cost drugs and then hiking their price.
The lawsuit said he obtained over $5.6 million in cash or Retrophin shares through his schemes and obtained the use of over two million shares of Retrophin, which were worth over $59 million last summer. A second defendant, attorney Evan Greebel, of Scarsdale, New York, was charged with conspiracy to commit wire fraud. The maximum sentence for the top count is 20 years in prison.
But it sparked outrage that resounded from medical centers to the presidential campaign: Hillary Clinton termed it price-gouging, while Donald Trump called Shkreli “a spoiled brat”. In one of his most recent, expletive-peppered interviews, he offered to bail a rapper out of jail in Brooklyn and pay for his legal defense – if he would make music especially for him, and offered to play his exclusive Wu-Tang Clan album for Taylor Swift – if she would give him a blow job.
Later, a magistrate approved a $5 million bond package, allowing Shkreli to go home after processing pre-trial paperwork.
Retrophin said it has since added new members to its board and management team, implemented new financial controls, and “further developed its pipeline of promising drugs for patients with rare diseases while steadily improving its operating performance”.
Retrophin, which Shkreli founded in 2011, sued its former boss in August for misuse of company funds.
On Thursday, following Shkreli’s arrest, Retrophin issued a statement.
Advertisement
Although sharp criticism made Shkreli bring down prices on Daraprim for hospitals, he was his vociferous self, as he streamed his personal life on YouTube, and boasted about buying the one of a kind Wu-Tang Clan album for $2 million, only to be distanced by the hip hop group.
