Big Pharma bro Martin Shkreli gained international notoriety when his company bought the rights to Daraprim—a drug used to treat parasitic infections, primarily in HIV patients—and suddenly raised the price by 5,000 percent overnight. He became the poster boy of greed and everything wrong with the pharmaceutical industry. Now he’s facing federal charges of securities fraud after federal agents arrested him overnight:
Prosecutors in Brooklyn charged him with illegally taking stock from Retrophin Inc., a biotechnology firm he started in 2011, and using it to pay off debts from unrelated business dealings. He was later ousted from the company, where he’d been chief executive officer, and sued by its board.
In the case that closely tracks that suit, federal prosecutors accused Shkreli of engaging in a complicated shell game after his defunct hedge fund, MSMB Capital Management, lost millions. He is alleged to have made secret payoffs and set up sham consulting arrangements. A New York lawyer, Evan Greebel, was also arrested early Thursday. He's accused of conspiring with Shkreli in part of the scheme.
Martin Shkreli has a long line of people after him, from investors in the pharmaceutical company Retrophin to SEC investigators. Nonetheless, he remained brash in recent interviews:
The Securities and Exchange Commission, which according to court documents opened an investigation into Shkreli in 2012, is expected to file a parallel civil complaint against him, according to people familiar with the matter.
Shkreli spoke cavalierly of the company’s lawsuit, saying, “The $65 million Retrophin wants from me would not dent me. I feel great. I’m licking my chops over the suits I’m going to file against them.”
Shkreli recently made news after it was revealed he bought a private album for $2 million from the hip-hop supergroup Wu-Tang Clan. When the band found out he was the buyer, they donated most of the money to charity.
Read more about the arrest of Martin Shkreli and the many investigations against him at Bloomberg Business.