Pharma Bro Martin Shkreli Guilty Of Securities Fraud

Image Source: CNBC

Former hedge fund manager and pharmaceutical executive Martin Shkreli, 34, also known as Pharma Bro, was found guilty of defrauding investors Friday.

Martin Shkreli is best known for a price-hike scandal that gained him and his company national attention, and earned him the Pharma Bro nickname. Shkreli was arrested in 2015 for funneling $11 million worth of stock from Retrophin — a drug company he ran — into two hedge funds.

After deliberating for five days, the U.S. District Court in Brooklyn found Shkreli guilty of two counts of securities fraud and one count of conspiracy to commit securities fraud, out of a total of eight charges. He now faces up to 20 years in prison for his actions, although legal experts claim it is likely to be much less.

Shkreli, the son of a Brooklyn Albanian family, made headlines last September when he and his company Turing Pharmaceuticals raised the price of Daraprim — a lifesaving antiparasitic medication used primarily to treat AIDS patients — by more than 5,000 percent from $13.50 to $750 per pill.

His decision rapidly propelled him to one of the most hated public figures in the United States. Shkreli seemed to relish the image, viciously trolling critics with obscenities on social media, earning him the title of Pharma Bro. He was eventually banned from Twitter.

Shkreli didn’t testify in court, following advice from his lawyers. He instead repeatedly appeared on his Facebook and YouTube Live Streams attacking prosecutors and media. Before the verdict, he even suggested that the jury would have to apologize to him when the case was over.

He wrote: “My case is a silly witch hunt perpetrated by self-serving prosecutors” and called for the draining of the sewer that is the Department of Justice.

Prosecutors claimed he had mislead investors about his activities since 2009, following a series of losing stock purchases. He apparently looted his other company, Retrophin, to recover the millions of dollars lost. Several investors testified against him.

Assistant U.S. Attorney Alixandra Smith accused him of telling “lies upon lies”. At one point he told investors one of his hedge funds had made $40 million, when it was actually worth around $300. He frequently bragged that he was a Columbia University alumnus, which was also untrue.

A number of potential jurors were kept from the panel after they criticized Shkreli as a “snake” and the modern “face of corporate greed”. He made a snide appearance at a House Oversight and Government Reform Committee meeting on Drug Pricing in February last year, refusing to answer U.S. lawmakers’ questions. He then immediately took to Twitter to attack them shortly afterwards.

The difficulty for prosecutors was that several wealthy investors testified that Shkreli had actually made money for them. Defense attorney Ben Brafman argued that no one had lost as a result of the 34-year-old’s activities and that investors had signed agreements indicating Shkreli wasn’t liable if the fund did badly. “Prosecutors blame me for everything,” Shkreli said, “They blame me for capitalism.”

The final outcome came as a blow for Shkreli, who shook his head in disbelief as the verdict was read.

In an interview outside the court he said:

“This was a witch hunt of epic proportions. Maybe they found one or two broomsticks, but at the end of the day we’ve been acquitted of the most important charges in this case, and I’m delighted to report that.”

He claimed there was a 50-50 chance he would go to jail, but still seemed confident of getting the charges dropped.

 

 

About the Author

Tucker J.
Tucker J.
Tucker is a foreign correspondent and media analyst for Not Liberal.

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