A boyish drug company entrepreneur, who rocketed to infamy by jacking up the price of a life-saving pill from $13.50 to $750, was arrested by federal agents at his Manhattan home early Thursday morning on securities fraud related to a firm he founded.
Martin Shkreli, 32, ignited a firestorm over drug prices in September and became a symbol of defiant greed. The federal case against him has nothing to do with pharmaceutical costs, however. 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.
Shkreli’s lawyer and a spokesman for Retrophin didn’t immediately respond to requests for comment. Greebel and his firm weren’t immediately available to comment either. A spokeswoman for Brooklyn U.S. Attorney Robert Capers did not immediately respond to a call and e-mail seeking comment.
Shkreli’s extraordinary history—and current hold on the public imagination—makes the case more noteworthy than most involving securities fraud. The son of immigrants from Albania and Croatia who worked as janitors and raised him deep in working-class Brooklyn, Shkreli both epitomizes the American dream and sullies it. As a youth, he showed exceptional promise and independence and, after dropping out of an elite Manhattan high school, began his conquest of Wall Street before he was 20.
I hope the SEC lawyers have a field day with this asshole and he gets the full Bernie Madoff. Couldn't have happened to a nicer aggregate colony of sentient fungus, I say. More truth from Steve M.:
Nothing terrible happens to you in this country if you shaft ordinary people. We saw that after the financial collapse. Shaft members of the investor class, however, and you really might face the law's wrath. Ordinary schmucks aren't full citizens. Want justice? Buy financial instruments. If you can't, tough luck -- the law doesn't care what happens to you.
Shrkeli screwed the wrong people, so I suppose he really could go to prison. However, I expect him to play the "troubled white guy" card, in court and possibly in the media. All the "bad boy" nonsense -- the incessant boasting, the taunting tweets, the $2 million purchase of that one-of-a-kind Wu-Tang Clan CD, the claim that he seeks to bail out imprisoned rapper Bobby Shmurda and also might pursue a rap career of his own -- I predict is going to be presented in court as a textbook case of bipolar disorder, or some condition on the autistic spectrum, that impairs Shkreli's judgment and renders him less than fully liable for his own acts.
We know that blacks arrested for violent crimes are always "thugs" and Muslims are always "terrorists," whereas even white guys who commit mass murder are "loners," "troubled" and "misunderstood." Will Shrkeli try to play the "troubled" card? It might not work, but that's what I'm betting on.
What's good, Martin?