Shkreli Arrested: Biotech's bad boy charged with securities fraud
NEW YORK — Martin Shkreli, the former hedge fund manager vilified for buying a pharmaceutical company and jacking up the price of a lifesaving drug more than fiftyfold, was arrested Thursday on securities fraud charges unrelated to the furor.
The boyish-looking 32-year-old entrepreneur — a relentlessly self-promoting figure who has called himself "the world's most eligible bachelor" on Twitter and recently plunged into the hip-hop world by buying an unreleased album by the Wu-Tang Clan — was taken into custody in a gray hoodie and pleaded not guilty in federal court in Brooklyn.
Online, many people were gleeful over his arrest, some of them joking about a judge ratcheting up his bail or lawyers jacking up their hourly fees 5,000 percent for defending him in his hour of need.
His attorneys had no immediate comment.
Shkreli was charged in an indictment unconnected to the drug price hikes imposed by his company Turing Pharmaceuticals. The charges instead involve his actions at another pharmaceutical company, Retrophin, which he ran as CEO up until last year.
Prosecutors said that in a "Ponzi-like scheme" between 2009 and 2014, Shkreli lost hedge fund investors' money through bad trades, then raided Retrophin for $11 million in cash and stock to pay back his disgruntled clients.
Shkreli "engaged in multiple schemes to ensnare investors through a web of lies and deceit," U.S. Attorney Robert Capers said in a statement.
Shkreli was charged with securities fraud and conspiracy. A second defendant, lawyer Evan Greebel, of Scarsdale, New York, was charged with conspiracy and also pleaded not guilty.
If convicted, both men could get up to 20 years in prison.
In August, Shkreli's Turing Pharmaceuticals spent $55 million for the U.S. rights to sell Daraprim, a 62-year-old drug for a rare parasitic infection, and promptly raised the price from $13.50 to $750 per pill. The drug is the only approved treatment for toxoplasmosis, a disease that mainly strikes pregnant women, cancer patients and AIDS patients.
The move sparked outrage on the presidential campaign trail, helped prompt a Capitol Hill hearing on drug prices, and turned the Brooklyn-born Shkreli into the new face of corporate greed. Headlines called him such things as "America's most hated man," the "drug industry's villain," ''biotech's bad boy" — and those were just the more printable names.
Hillary Clinton called it price-gouging and said the company's behavior was "outrageous." Donald Trump called Shkreli "a spoiled brat." Bernie Sanders returned a donation from Shkreli.
Shkreli said the company would cut the price of Daraprim. Last month, however, Turing reneged. Instead, the company is reducing what it charges hospitals for Daraprim by as much as 50 percent.
Copays will be $10 or less, but insurers will be stuck with the bulk of the tab.