After years of case-building, federal prosecutors will finally meet Martin Shkreli in court Monday, June 26, for a six-week trial. The former hedge-fund manager and pharmaceutical executive will face eight charges of securities and wire fraud, for which he has pleaded not guilty.
“I’m so innocent, the jury, judge and the prosecution are gonna give me an apology,” Shkreli said in one of his recent live streams.
Shkreli had resigned as CEO of Turing Pharmaceuticals, a company he cofounded, following his 2015 arrest and indictment on securities fraud by the Federal Bureau of Investigation. Turing's board met last Wednesday and shareholders voted to elect Shkreli's slate of board nominees, a source close to the matter told Benzinga.
However, the "pharma bro" appears happy just where he's at.
The story began with Shkreli’s co-founding of MSMB Capital Management in 2009 and subsequent co-founding and leadership of Retrophin Inc RTRX in 2011.
Prosecutors allege he defrauded MSMB investors, lied to them about the fund’s performance and operations, and, after the firm folded, paid them with $11 million in Retrophin assets without the authorization of the pharmaceutical board.
In September 2014, Retrophin ousted Shkreli as CEO — a move his lawyers now consider in violation of his contract and relevant to their defense.
The board then filed a $65 million suit in August 2015 for alleged misuse of company funds and violation of securities rules.
By that point, Shkreli had already earned public derision for the price hikes of critical, unchallenged and potentially life-saving drugs. Retrophin had acquired rights to Thiola and Chenodal, whose prices it inflated a respective 20 times and five times, while Turing Pharmaceuticals, where Shkreli served as co-founder and CEO, raised Daraprim costs from $13.50 to $750.
“[Shkreli] engaged in multiple schemes to ensnare investors through a web of lies and deceit… His plots were matched only by efforts to conceal the fraud, which led him to operate his companies…as a Ponzi scheme," Capers said at a 2015 press conference.
Following his arrest, Shkreli resigned from Turing and was also terminated by KaloBios Pharmaceuticals, where he had served as CEO.
In September 2016, Retrophin reported positive results from a Phase 2 DUET study of sparsentan among patients with a rare kidney disease. Shkreli said the clinical trial, which was built on more than $20 million in research and development, justified the price gouging of which he was accused.
Retrophin stock saw 40-percent gains on the study, whose outcome Adam Feuerstein, STAT News reporter who at the time covered biotech for The Street, had attributed to Shkreli.
Image Credit: By House Committee on Oversight and Government Reform [Public domain], via Wikimedia Commons
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