Drug CEO, who jacked up price of life-saving drug, held on $5M bail
ASSOCIATED PRESS
Martin Shkreli, the former hedge fund manager under fire for buying a pharmaceutical company and ratcheting up the price of a life-saving drug, is escorted by law enforcement agents in New York today after being taken into custody following a securities probe.
ASSOCIATED PRESS
Activists pour cat litter on an image of Turing Pharmaceuticals CEO Martin Shkreli in a makeshift cat litter pan during a protest highlighting pharmaceutical drug pricing in New York. Shkreli, the former hedge fund manager under fire for buying a pharmaceutical company and ratcheting up the price of a life-saving drug, is in custody following a securities probe, Thursday, Dec. 17, 2015.
NEW YORK » Martin Shkreli, the former hedge fund manager and pharmaceutical-company CEO vilified for jacking up the price of a lifesaving drug more than fiftyfold, was arrested today on securities fraud charges unrelated to the furor.
The boyish-looking 32-year-old entrepreneur — a relentlessly self-promoting figure who has called himself “the world’s most eligible bachelor” on Twitter and recently plunged into the hip-hop world by buying an unreleased album by the Wu-Tang Clan — was taken into custody in a gray hoodie and pleaded not guilty in federal court in Brooklyn. A judge set bail at $5 million.
Online, many people were gleeful over his arrest, some of them joking about a judge ratcheting up his bail or lawyers jacking up their hourly fees 5,000 percent for defending him in his hour of need.
His attorneys had no immediate comment.
Shkreli was charged in an indictment unconnected to the drug price hikes imposed by his company Turing Pharmaceuticals. The charges instead involve his actions at another pharmaceutical company, Retrophin, which he ran as CEO up until last year.
Prosecutors said that in a “Ponzi-like scheme” between 2009 and 2014, Shkreli lost hedge fund investors’ money through bad trades, then raided Retrophin for $11 million in cash and stock to pay back his disgruntled clients.
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Shkreli “engaged in multiple schemes to ensnare investors through a web of lies and deceit,” U.S. Attorney Robert Capers said in a statement.
Shkreli was charged with securities fraud and conspiracy. A second defendant, lawyer Evan Greebel, of Scarsdale, New York, was charged with conspiracy and also pleaded not guilty.
If convicted, both men could get up to 20 years in prison.
In August, Shkreli’s Turing Pharmaceuticals spent $55 million for the U.S. rights to sell Daraprim, a 62-year-old drug for a rare parasitic infection, and promptly raised the price from $13.50 to $750 per pill. The drug is the only approved treatment for toxoplasmosis, a disease that mainly strikes pregnant women, cancer patients and AIDS patients.
The move sparked outrage on the presidential campaign trail, helped prompt a Capitol Hill hearing on drug prices, and turned the Brooklyn-born Shkreli into the new face of corporate greed. Headlines called him such things as “America’s most hated man,” the “drug industry’s villain,” ”biotech’s bad boy” — and those were just the more printable names.
Hillary Clinton called it price-gouging and said the company’s behavior was “outrageous.” Donald Trump called Shkreli “a spoiled brat.” Bernie Sanders returned a donation from Shkreli.
Shkreli said the company would cut the price of Daraprim. Last month, however, Turing reneged. Instead, the company is reducing what it charges hospitals for Daraprim by as much as 50 percent.
While most patients’ copayments will be $10 or less a month, insurance companies will be stuck with the bulk of the tab, potentially driving up future treatment and insurance costs.
Shkreli said that insurance and other programs would allow patients to get the drug despite the cost and that the profits are helping fund research into new treatments.
But he also made an unapologetic business-is-business argument for the price jump. In fact, he recently said he probably should have raised it more.
“No one wants to say it, no one’s proud of it, but this is a capitalist society, a capitalist system and capitalist rules,” he said in an interview at the Forbes Healthcare Summit this month. “And my investors expect me to maximize profits, not to minimize them or go half or go 70 percent but to go to 100 percent of the profit curve.”
The Campaign for Accountability, a nonprofit watchdog group that urged Congress to investigate Shkreli’s price increases, called his arrest “long overdue” and added: “He has avoided accountability despite a pattern of fraudulent behavior.”
Shkreli is known as a prolific user of Twitter and often livestreams his work day over the Internet, the camera showing him at his desk as he does business, kills time on the Web and invites people to chat with him. He refers to those who follow him online as his “fans.”
Recently it emerged that he bought the only copy of a Wu-Tang Clan album titled “Once Upon a Time in Shaolin,” which the group sold on the condition that it not be released publicly. He said he paid $2 million.
In August, though, Retrophin sued Shkreli for more than $65 million, accusing him of using his control of the company to enrich himself and to pay off the claims of financial fund investors he had defrauded.
Last month, Shkreli was named chairman and CEO of KaloBios Pharmaceuticals, a struggling cancer drug developer. After his arrest, its stock fell by more than half today before trading in the company was suspended.
Associated Press writers Larry Neumeister and Jennifer Peltz in New York and Linda A. Johnson in Trenton, New Jersey, contributed to this report.
29 responses to “Drug CEO, who jacked up price of life-saving drug, held on $5M bail”
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Wall Street’s should be paying a higher tax rate if it is testing out our penal, justice system in a bad way.
Your lead story and it doesn’t tell me anything! Nice reporting.
Lazy reporting by the SA who utilize Cut and Paste from The AP. Here’s the indictment from The NY Times:
http://www.nytimes.com/interactive/2015/12/17/business/document-indictment-charges-shkreli-with-security-fraud.html
BACHI…
Bachi means bad luck in Japanese.
Nah…I know that Japanese language teacher…Would you say he has good luck or bad? You bakatade!
No….you were wrong and you know it. This guy does not have bad luck. You blew it Dawg. Soody!
The rich have nothing to fear, A little tiny slap on the hand is probably what he will receive. The system is rigged for the elite and comes down hard on the ones that aren’t. Albert Hee is another example. This crook is actually trying to avoid prison time because of some allergy nonsense. There isn’t any parity.
Ahhh yes, what goes around comes around. Lets see how much money this babooze can spend while he is in prison. What a low life, dreg of the earth he is.
That’s what I say. Took advantage of people that really need the drug. Now, his turn to “PAY.”
Thirty-two years old, and his life is over with.
Alright! American Greed! Make him pay just like he wished upon others.
“The boyish-looking 32-year-old entrepreneur — a relentlessly self-promoting figure who has called himself “the world’s most eligible bachelor” on Twitter….” Lot’s of suitors in prison.
My puppies also went to a social media online to promote themselves, too.
You watch WAAAY too many movies. IF he goes to prison it will be white-collar federal and he’ll get it on with other dorks because he really wants to, not because he will be forced to.
he kind of reminds me of Gordon Gekko.
Gordon Gekko? More like, Grinded Get Lost?
He will be the most eligible bachelor in prison for next 20 years. What a greedy loser so full of himself ! Shame.
“the world’s most eligible bachelor” is in deep manure.
Opportunistic and ‘what goes around, comes around’.
Let’s all wait and see if he is found guilty and then what his sentence is. Hopefully, he will be found guilty and get the whole 20 years.
As someone else already posted there are lots of folks in prison waiting for this “eligible bachelor” to show up.
Bwahahahahaha
I don’t know how this man sleeps at night. It should be illegal to price gouge sick people that have no other option but to pay these outrageous prices or die. It’s just not right no matter how he rationalizes it.
All boyish looking inmates get a new broomstick in their jail cell. I wonder what it will be use for?
just so he doesn’t drop the soap in the shower. . .
HAJAA! is ONe-Okole-Puka!
Getting his just reward for his greed.
Why is he allowed bond???? This scumbag can EASILY pay this and then disappear to some country that does not have extradition agreement with us!!!
Sorry meant to say bail!!
And what’s unfortunate for him is that there probably isn’t a single person in the US who is sorry to see him indicted and arrested.