Martin Shkreli found guilty of fraud
NEW YORK — Martin Shkreli, accused of defrauding his hedge fund investors and a pharmaceutical company, was convicted on three of eight counts on Friday, after a five-week trial in U.S. District Court in Brooklyn, N.Y.
Shkreli was convicted of securities fraud in connection with his hedge fund MSMB Capital; of securities fraud in connection with another hedge fund he ran, MSMB Healthcare; and of conspiracy to commit securities fraud, related to a scheme in which he tried to secretly control a huge portion of shares of Retrophin, a drug company he started.
He faces up to 20 years on each of the first two counts, and up to five years on the final count.
Shkreli, 34, was acquitted of the count that potentially carried the most weight for sentencing: count seven, which charged him with defrauding Retrophin by creating sham consulting agreements and unauthorized settlement agreements. That charge was associated with the biggest financial loss, which judges take into account when deciding on sentences in fraud cases.
Bridget Rohde, the acting U.S. attorney for the Eastern District of New York, the federal prosecutors’ office in Brooklyn, said she was “gratified” by the verdict. “Our work is not done: Shkreli remains to be sentenced, and there’s a co-defendant in the case,” she said, referring to Evan Greebel, Shkreli’s onetime lawyer, who is scheduled to be tried in the fall.
As Judge Kiyo A. Matsumoto read the verdict, Shkreli, wearing a black polo shirt and khakis, stood with his arms crossed.
He showed outward relief when Matsumoto said he was found not guilty on count seven, mouthing “Yes” and patting his lawyer Benjamin Brafman on the back. When she said he was guilty of count eight, the Retrophin securities-fraud conspiracy, he hung his head.
A sentencing date was not set; Matsumoto said she would wait for submissions from both sides on how much money was lost, as the sentencing depends on that. She set a fall date for those submissions.