Martin Shkreli, once dubbed "the most hated man in America," has been convicted of fraud.
Shkreli, notorious for raising the price of a potentially life-saving drug by 5,000 percent, was found guilty Friday of defrauding investors in two hedge funds and in Retrophin Inc, a pharmaceutical company he co-founded.
He is now almost certain to go to prison. Shkreli faces as long as 20 years in prison, although he’s likely to serve much less. It remains to be seen whether the judge in federal court in Brooklyn, New York, allows him to return home, where he’s spent hours each day on social media, or sends him to jail right away to await sentencing later this year.
US District Judge Kiyo Matsumoto didn't set a date for sentencing.
Lies to investors
In the end, it was Shkreli’s lies to his investors that cost him his freedom, not his 2015 decision to jack up the price of an anti-parasitic drug. Prosecutors said Shkreli, 34, misled clients about the performance of his failing hedge funds, secretly used their money to start Retrophin, and then took $11 million from the drug-development company to repay them.
Shkreli was convicted of three of eight charges, including securities fraud.
The verdict came on the fifth day of deliberations after a trial that sometimes resembled a circus. Shkreli’s notoriety for boosting the price of Daraprim made jury selection a time-consuming process as dozens of prospective jurors expressed contempt for him. One called him a “snake,” and another said he was “the face of corporate greed.” Neither was selected for the panel.
Pharma bro
Hailed as “Pharma Bro” by his online supporters, Shkreli has won a following for sharing much of his life on the Internet, broadcasting live from his Manhattan apartment. In the evenings after a long day in court, he could be seen chatting with his followers, petting his cat, combing his hair and playing chess. While he was kicked off Twitter for harassing a female journalist, he took to Facebook during the monthlong trial to rail against prosecutors.
Prosecutors presented more than a dozen witnesses, including investors who said they had trouble recovering their money from Shkreli and former employees who recounted questionable transactions. A former compliance officer said he got so tired of his boss's antics that he quit and complained to the U.S. Securities and Exchange Commission.
Deceit
The government painted Shkreli as a conman and habitual liar. They said his deceit involved not only the performance of his funds and how he used investor money, but his educational background and prior investing experience. Jurors were shown what prosecutors said were sham consulting agreements that Shkreli drafted as part of one of his many schemes to pay back some investors.
Prosecutors said Shkreli boasted to potential hedge fund clients that he was managing as much as $100 million when the net value of one of his funds fell to minus 33 cents, and never held more than $3 million.
- (Bloomberg)
