Turing Pharmaceuticals CEO Martin ‘Pharma Bro’ Shkreli first gained notoriety after he took a drug that cancer and AIDS patients desperately need, and jacked up the price to 5,000% overnight. Early this Thursday, he was arrested for federal securities fraud.
Federal agents took Shkreli into custody for taking stock from a company he once owned, but was “unceremoniously dumped” by last year. The company, Retrophin, sued Shkreli, and according to documents Shkreli decided that the little company would be his way out of debt. He used “extra-legal maneuvers” to take money from it anytime he wanted, and now they rightfully want it back.
Shkreli’s shady way of doing business actually cost one of the investors into Retrophin to go “virtually bankrupt,” because while he had people steadily pouring money into the endeavor, he was just as steadily selling its stock to turn a personal profit.
I feel like we'd have to invent Martin Shkreli if he didn't exist.
— Benjy Sarlin (@BenjySarlin) December 17, 2015
The indictment is currently sealed but Gawker reports that Shkreli has many alleged crimes to answer for here. In fact, Newsweek says that the indictment includes “such a vast number of suspected crimes it is difficult to know where to start.”
— New York Daily News (@NYDailyNews) December 17, 2015
For example, MSMB made a $900,000 investment in Retrophin. Afterward, on February 1, 2012, the investment was reclassified as a loan. That would be as if an investor purchased a share in Microsoft and then later demanded full repayment of the purchase price plus interest, regardless of the market price for the stock.
The $900,000 plus interest was returned to MSMB on March 31, 2013. That same day, another $575,000 was paid to Shkreli as a purported performance bonus; all of that money, in fact, allegedly went directly to pay for settlement of arbitration against MSMB and Shkreli. Then, according to the data obtained by the government, the company paid or forgave another $1.2 million of obligations primarily for the benefit of MSMB, none of which was disclosed.
Another person has been taken into custody by federal authorities along with Shkreli — a corporate lawyer by the name of Evan L. Greebel.
[Gawker] Featured image via Twitter