On Friday a federal jury found notorious “Pharma bro” Martin Shkreli guilty of three counts of securities fraud (but not on the five other criminal counts related to hedge funds investors and a drug company he founded). Shkreli remains free on $5 million bail and faces a maximum sentence of 20 years in prison. However, it’s unlikely he will do that much time given his lack of a criminal record.
The judge did not set a sentencing date but that will happen after prosecutors and defense lawyers argue how much, if any, money Shkreli should be ordered to forfeit.
You’ll remember Shkreli as the wretched human who raised the price of a life-saving drug, Daraprim from $13.50 per pill to $750 per pill, in 2015. That’s MORE THAN 5,000 PERCENT. But hey, three is still something.

During the trial, prosecutors claimed Shkreli had “defrauded multiple investors in his two hedge funds out of millions of dollars, only to repay them with stock and cash that he looted from the biotech company he created, Retrophin.” 1

Shkreli’s lead lawyer, Benjamin Brafman, said “I think this verdict is a reasonably good verdict under the circumstances … we are 90 percent pleased.” 2

In 2015 when Shkreli caused the intense backlash with his drug price hike, he was already being investigated for running this “Ponzi-type Scheme.” At trial, prosecutors said evidence and testimony showed Shkreli duped “multiple investors into putting millions of dollars into two hedge funds he ran, MSMB Capital and MSMB Healthcare, by falsely claiming to have an excellent record of running such funds, and by falsely stating his investment strategy had a low level of risk.”3

However, after getting their money, Shkreli quickly lost most of it and used some of what was left to capitalize his company Retrophin. And he did all of this while sending out financial statements to his investors claiming positive returns.

When investors asked for their money to be redeemed to them in cash, Shkreli brushed them off- for months. When this didn’t work he invested excuses about why he couldn’t get them their money or would suggest different ways to pay them back. Prosecutors then say he improperly used Retrophin stock and cash to pay off the funds’ investors.


More on the story with an update when they sentence this big pharma bro (Whose co workers testified at trial that he’s MENTALLY UNSTABLE. Shocker.)


Sources and References

  1. CNBC, Aug 4, 2017.
  2. CNBC, Aug 4, 2017.
  3. CNBC, Aug 4, 2017.