‘ PHARMA BRO’ MISLED US, SAY INVESTORS
Shkreli’s defense argues no one was financially harmed
Martin Shkreli, the so- called “pharma bro,” is all about disclosures on social media. But when it came to business, he was hardly transparent, according to two former investors.
The investors testified Monday that Shkreli misled them and stalled their efforts to cash out — nearly wrecking one of the men’s plans for another financial deal.
The investors described a monthslong “runaround” of unanswered emails and phone calls before they recovered their initial stakes, along with large profits.
The testimony of Richard Kocher, a New Jersey building contractor, and Schuyler Marshall, a Texas attorney, was aimed at supporting prosecution arguments that Shkreli lied and violated financial rules while allegedly scamming investors in two of his former hedge funds. He also is accused of illegally reimbursing some of the hedge fund investors with stock and financial resources from Retrophin, a pharmaceutical company he founded and previously headed.
Challenging Kocher and Marshall under cross- examination, defense lawyers argued that Shkreli did nothing wrong and stressed that both men ultimately were made financially whole.
Monday’s proceedings underscored a legal question underlying the trial: Could Shkreli be convicted on conspiracy and securities fraud charges if his investors weren’t financial victims but instead made money?
Kocher detailed what he characterized as the “painful process” of trying to recover his $ 200,000 investment that started in September 2012 when Shkreli unexpectedly notified investors about plans to close the funds. The announcement offered repayments with cash, Retrophin stock or a combination of the two.
Shkreli stalled redemption efforts well into 2013, Kocher testified in response to prosecution questioning. Shkreli offered repayment through Retrophin stock that could not immediately be sold or traded, amove Kocher likened to “an insult.”
Kocher said he felt betrayed because he had contributed $ 100,000 “on a day’s notice” to help Shkreli’s funds survive a financial squeeze.
Subsequently, Kocher faced a tough spot of his own. He needed his money back to finalize a planned real estate purchase in New Jersey, the businessman testified.
“My problem was I needed cash,” Kocher said, explaining that Shkreli’s delays forced him to recruit a partner to salvage the property deal.
He gave Shkreli repeated reminders about that episode, threatened legal action and accused Shkreli of having a conflict of interest by running the hedge funds and Retrophin simultaneously.