The infamous pharmaceutical CEO Martin Shkreli has been arrested. It wasn’t, however, related to his 5,000% hike of a life-saving AIDS drug. Instead, the SEC seems to have caught Shkreli playing with numbers just a bit too liberally.
Shkreli has been charged with securities fraud by the U.S. Securities and Exchange Commission. According to the SEC, the ousted Chief Executive Officer of Retrophin illegally took stock from the company in order to pay off unrelated debt incurred in separate business dealings. Now Federal prosecutors are also accusing him of making secret payoffs and setting up fraudulent consulting arrangements in order to shore up the losses of now-defunct hedge fund MSMB Capital Management. Evan Greebel, a New York lawyer associated with Shkreli, has also been arrested for some measure of conspiracy in the matter.
The charges are numerous. Authorities have described the investment and subsequent loss of over $5 million, covered by allegedly false reports of returns. At one point, Shkreli claimed returns of more than 35% while actually operating under a loss of 18%. He then allegedly used the money he was given on himself, paying for lavish personal expenses with client money and lying to his broker about his actions.
Retrophin has also filed a suit against Shkreli for allegedly spending vast amounts of their money to pay off angry claimants regarding his hedge fund mismanagement, but Shkreli claims that the suit “would not dent” him. He’s “licking his chops” over counter suits he plans to file against them and says that all of his supposedly backdoor deals were made with the approval of unidentified “outside counsel.” He previously responded to those allegations via InvestorHub.
Retrophin has been only too happy to comply with the government in the case against their former CEO. Evan Greebel’s current firm, Kaye Scholer, has been just as eager to distance themselves from the lawyer’s suspect activities. Even 2016 presidential candidates have gotten in on the Shkreli hate: Donald Trump called Martin Shkreli a “spoiled brat,” and even the erratic Bernie Sanders turned a campaign donation down flat from him.
You’d think that the level of animosity directed at him from both sides of the aisle might prompt some level of introspection, but you’d be wrong. Given the chance to do things over again, Shkreli has said that he’d have raised the price of Daraprim even higher. And if his open spite wasn’t endearing enough, he made even more friends by throwing money at the Wu Tang Clan for the single copy of their latest album.
For the moment, Martin Shkreli has been released on a $5 million dollar bond, with his travel restricted to parts of New York. If convicted of the crimes accused, the federal government will likely render this pharmaceutical “bad boy” a bit less flush. And maybe, if we’re lucky, they’ll take back that Wu Tang Clan album as well. That is, if Bill Murray doesn’t get to it first.
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