|Martin Shkreli being taken away in handcuffs|
Few individuals personify the epitome of vulture capitalism and pharmaceutical company greed more than Martin Shkreli, a former hedge fund operator and douche bag who purchased a pharmaceutical company and then promptly raised the price of a drug used to treat infections that can be devastating for babies and those with AIDS from $13.50 a pill to $750 a pill. Today, the lime ball and arrogant bastard (who seems to have studied the art under Donald Trump) got his just deserves and was arrested by the FBI on securities fraud and wire fraud charges. The New York Times has details. Here are highlights:
It has been a busy week for Martin Shkreli, the flamboyant businessman at the center of the drug industry’s price-gouging scandals.He said he would sharply increase the cost of a drug used to treat a potentially deadly parasitic infection. He called himself “the world’s most eligible bachelor” on Twitter and railed against critics in a live-streaming YouTube video.
Then, at 6 a.m. Thursday morning, federal authorities arrested Mr. Shkreli, 32, at his Murray Hill apartment. He was arraigned in Federal District Court in Brooklyn on securities fraud and wire fraud charges.
Mr. Shkreli has emerged as a symbol of pharmaceutical greed for acquiring a decades-old drug used to treat an infection that can be devastating for babies and people with AIDS and, overnight, raised the price to $750 a pill from $13.50. His only mistake, he later conceded, was not raising the price more.
Those price increases combined with Mr. Shkreli’s jeering response has made him a lightning rod for public outrage and fodder for the presidential campaign. His company, Turing Pharmaceuticals, and others, like Valeant Pharmaceuticals, have come under fire from lawmakers and consumers for profiting from steep price increases for old drugs.But the criminal charges brought against him actually relate to something else entirely — his time as a hedge fund manager and when he ran his first biopharmaceutical company, Retrophin. Federal officials described his crimes as a quasi-Ponzi scheme in which he used money from his company to pay off money-losing investors in his hedge funds. An F.B.I. official called his business schemes a “securities fraud trifecta of lies, deceit and greed.”Still, for many of his critics, Mr. Shkreli’s arrest was a comeuppance for the brash, irreverent executive who has seemed to enjoy — relish, even — his public notoriety.
“Personally, I think Martin Shkreli has become wealthy at the expense of the public good. I don’t believe for a second that his manipulation of drug prices fuels valuable research as he has claimed,” said Katie Uva, a 2006 alumni of Hunter College High School in Manhattan where Mr. Shkreli attended, in an email response to questions. This fall, Ms. Uva started an online fund-raising campaign to match a $1 million donation from Mr. Shkreli to Hunter in the hope of persuading the school to return the donation.
MSMB’s performance wasn’t nearly as hot as Mr. Shkreli let on. From 2009 through 2012, Mr. Shkreli lost millions of dollars trading in the market, according to the accusations contained in the indictment. But he hid those losses, telling investors instead that the funds had strong double-digit returns.
In 2011, Mr. Shkreli started Retrophin, which quickly adopted a controversial business strategy, acquiring old, neglected drugs used for rare diseases and quickly raising their prices.Soon, however, Mr. Shkreli was embarking on a plan to use Retrophin assets to pay off MSMB investors. . . . When seven MSMB investors threatened to sue in 2013, Mr. Shkreli and Evan Greebel, the lead outside counsel for Retrophin, used $3.4 million in Retrophin funds and stock to settle the investors’ claims, even though Retrophin had no responsibility, the indictment says.[W]hen Retrophin’s auditor raised questions about the settlements, Mr. Shkreli and Mr. Greebel created fraudulent consulting agreements for the investors, thinking they could pay the money back without upsetting the auditor, the indictment states. From September 2013 to March 2014, they created fake consulting agreements for four investors, paying $7.6 million in cash and stock. Retrophin’s board did not approve of the consulting agreements, the indictment says.In September 2014, Retrophin ousted Mr. Shkreli as its chief executive. A lawsuit filed this summer by the company mirrors many of the same accusations contained in the federal charges.