Pharmaceutical CEO Martin Shkreli Arrested For Securities Fraud
The pharmaceutical executive notorious for hiking drug prices, Martin Shkreli, was arrested for fraud Thursday. The 32-year old drug entrepreneur and former hedge fund manager earned the title of “the most hated man in America” earlier this year when it was revealed that he hiked up the price of a life-saving HIV pill from $13.50 to $750 per dose to boost his own profits. But on Thursday morning, Shkreli was arrested in his Manhattan home, according to Bloomberg News, on unrelated securities fraud charges. Now accused of using assets from a former company to pay off personal debts, Shkreli could be facing as much as five years in federal prison for each charge.
Federal prosecutors are investigating Shkreli over a complicated scheme involving massive debts from MSMB Capital Management, a now-defunct hedge fund. Shkreli was a fund manager at MSMB before the fund went under, losing millions. From there, the young entrepreneur went on to start biotechnology firm Retrophin, Inc. in 2011. Now Shkreli is accused of using profits from Retrophin to make secret payoffs to resolve his debts in the wake of the MSMB failing, according to The New York Times.
Shkreli was fired from his post as chief executive of Retrophin in 2014, and was later sued by the board for misuse of company funds, Bloomberg reported.
While the details of any penalties Shkreli could face if convicted haven’t been made public, a conviction for securities fraud can typically mean a combination of fines, probation, and even jail time. Fines can run into the millions for certain types of securities fraud, and the accused can face up to 5 years in prison for each offense.
It seems Shkreli has gone out of his way to raise the public’s ire. He first became a household name in September over his decision to raise the price of HIV drug Daraprim by 5,000 percent. Shkreli quickly became a trending topic both on social media and the campaign trail, as Democratic presidential candidate Hillary Clinton weighed in on the Shkreli issue with a vow to address pharmaceutical price gouging. Bernie Sanders turned down a $2,700 donation from the entrepreneur, and even Donald Trump said that Shkreli “looked like a spoiled brat.”
Since then, Shkreli has become a figure that America loves to hate. Earlier this month, Bloomberg reported that Shkreli, a devoted rap fan, had purchased the only copy ever made of the last album by legendary rap group Wu-Tang Clan. The group had announced in 2014 that it would make a single copy of the album and sell it to the highest bidder. Shkreli later told Bloomberg Businessweek that he “had no immediate plans” to listen to it.
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