February 2023 | Volume 14, Issue 7

Find the full article on CNN Money.

According to the article, Martin Shkreli, who gained national notoriety two years ago for jacking up the price of a drug used by AIDS patients, was convicted of securities fraud for mismanaging two investment funds.

A jury in Brooklyn deliberated almost five days before returning guilty verdicts against Shkreli, 34, on two counts of securities fraud and a single count of conspiracy. He was acquitted of five other counts of conspiracy.

The most serious count, securities fraud, carries a maximum prison term of 20 years.

When the first guilty verdict was delivered, Shkreli looked to his right with a surprised smirk. Outside, he called his prosecution "a witch hunt of epic proportions," and he focused on the acquittals. "Maybe they found one or two broomsticks," he said.

Barely an hour after the verdict, he was livestreaming on YouTube from his apartment, holding a beer and predicting that the sentence would be "close to nil." He said that if he does go to prison, it will probably be a "Club Fed" where he will "play basketball and tennis and Xbox" for a couple of months.

Shkreli's lawyer, Benjamin Brafman, raised the prospect of an appeal and said the verdict would give the court "enormous discretion" on sentencing. No sentencing date was set.

Federal prosecutors accused Shkreli of cheating investors out of more than $11 million between 2009 and 2014 in what amounted to a Ponzi scheme.

They said he mismanaged money at the investment funds Elea Capital, MSMB Capital and MSMB Healthcare, as well as while he was CEO of Retrophin (RTRX), a pharmaceutical company he founded in 2011.

Prosecutors argued that he lied to investors at MSMB Capital and MSMB Healthcare about how well the funds were doing, and that he used money from Retrophin as a piggy bank to pay off MSMB investors, and to cover personal loans and other debts.

"Shkreli misled investors in his self-indulgent scheme," FBI Assistant Director-in-Charge William Sweeney said in a statement after the verdict. "Today's conviction shows that those who corrupt the market will ultimately be brought to justice."

Brafman framed his client as an oddball genius who ultimately made his investors richer. He said that Shkreli never intended to defraud anyone and called him an "honest kid."

Shkreli drew national scorn two years ago when, as the CEO of Turing Pharmaceuticals, he unapologetically raised the price of a lifesaving drug used by some AIDS patients from $13.50 per pill to $750. That episode is unrelated to the fraud case.

The Daily Beast named him the "most hated man in America." He defended the price hike, claiming that his company needed to profit from the drug. He also said that everyone who needs it would be able to afford the drug, Daraprim.

After his indictment, Shkreli used Twitter and Periscope to livestream himself playing video games in his pajamas and chronicle trips around New York to about 200,000 followers.

Shkreli was kicked off Twitter and Periscope after making unwanted advances toward a magazine editor. He kept up his use of social media throughout the trial, posting videos on Facebook despite efforts by prosecutors and his own lawyer to keep him quiet.

"My case is a silly witch hunt perpetrated by self-serving prosecutors," he said on Facebook at one point. "Thankfully my amazing attorney sent them back to junior varsity where they belong. Drain the swamp. Drain the sewer that is the DOJ. MAGA."

“Martin Shkreli Sentenced to 7 Years for Securities Fraud”

According to the article, Martin Shkreli, the former pharmaceutical executive who has been publicly excoriated for sharply increasing the price of a lifesaving HIV drug and derisively referred to as the "Pharma Bro," was sentenced to seven years in prison for defrauding investors in two failed hedge funds and a drug company he once ran.

It's less than half of the 15 years prosecutors were seeking, but it far exceeds the minimum 18-month sentence Shkreli's attorneys were hoping to secure for their client.

Shkreli was found guilty on two counts of securities fraud for duping hedge fund investors in MSMB Capital Management and MSMB Healthcare about the financial performance of the two companies that he operated. And he was convicted of conspiracy to commit securities fraud for manipulating stock shares of Retrophin, a pharmaceutical company he created.

U.S. District Judge Kiyo Matsumoto also ruled that Shkreli must forfeit the money he made from his fraud — nearly $7.4 million — and pay a $75,000 fine. If Shkreli cannot come up with the funds to pay back the government, he will have to hand over a few prized possessions, including a one-of-a-kind Wu-Tang Clan album and a Picasso painting.

Shkreli, who has often appeared defiant both in the courtroom and in interviews, made a sob-filled plea for leniency during the 2 1/2-hour proceedings leading up to Matsumoto's decision.

“The one person to blame for me being here today is me,” a choked-up Shkreli told a judge before she imposed the prison term. “Not the government. There is no conspiracy to take down Martin Shkreli. I took down Martin Shkreli with my disgraceful and shameful actions.”

“This is my fault. I am no victim here,” Shkreli said, before breaking down into tears as he promised not to let his lawyer Benjamin Brafman down in his efforts to contribute to society.

“Do not feel bad for me,” Shkreli told a packed courtroom that included many of his supporters and family members.

And he had a message for the investors he duped: “I am terribly sorry I lost your trust ... You deserve far better.”

Shkreli emerged as a public villain in 2015 after raising the price of Daraprim by more than 5,000 percent, from $13.50 to $750 per pill as CEO of Turing Pharmaceuticals. A later offer to pay $5,000 for a strand of Hillary Clinton's hair — follicle included — after his conviction when he was out on bail, did nothing to rehabilitate his image. In fact, Matsumoto sent him back to jail for the stunt that Shkreli later claimed was a joke.

In a letter to the judge, Shkreli wrote: “I feel I should try to explain my personality. I am an irreverent and free-wheeling individual who has never been shy about speaking my mind. I am an individual who prizes equal rights, scholastic achievement, and individuality. Please understand that when I get into a public war of words with someone, my comments do not always reflect my true nature. Sadly, when I get dragged into a mud fight, I often dive in, headfirst.”

Shkreli has been held in a federal prison in Brooklyn, N.Y., for six months. He said being behind bars is "both the most frightening experience of my life but also an opportunity for me to see a side of the world seldom seen or discussed."