Northwest Arkansas Democrat-Gazette
Shkreli trial jury selected; prosecutors start fraud case
NEW YORK — Martin Shkreli got his first taste of Wall Street as an intern for a hedge fund firm started by CNBC personality Jim Cramer. After striking out on his own, he developed a reputation for aggressive tactics, including betting a company’s stock price would fall and then berating its executives on social media.
His battles earned him a spot on Forbes’ list of “30 under 30” after Shkreli torpedoed a health-care industry merger and “antagonized” pharmaceutical giant Pfizer into removing its former chief executive from the company’s board of directors, the maga-
zine said. Shkreli, now 34, is a “boy genius,” his attorney has said.
But one of Shkreli’s most aggressive moves changed that narrative when, as chief executive of Turing Pharmaceuticals, he raised the price of Daraprim — a 62-year-old drug primarily used to treat newborns and HIV patients — from $13.50 to $750 a pill. When critics pounced, the live-out-loud Shkreli did not do his reputation any favors by calling a journalist a “moron,” quoting defiant rap lyrics on Twitter and defending the price increase as a “great business decision.”
“Our shareholders expect us to make as much money as possible,” Shkreli said during a health-industry summit in 2015. “That’s the ugly, dirty truth.”
These two images of the Brooklyn native are playing out in federal court this week as Shkreli faces eight charges including wire fraud, securities fraud and conspiracy that could land him in prison for years.
Packed into the secondfloor courtroom in Brooklyn, several potential jurors said they had already formed strong opinions of Shkreli. One potential juror told U.S. District Judge Kiyo Matsumoto that Shkreli is “the price gouger of drugs. My kids are on some of these drugs.”
Another said, “I know he’s the most hated man in America,” while another asserted
that “from everything I’ve read, I believe the defendant is the face of corporate greed in America.” All were excused from the jury.
Shkreli sat alone only a few feet away, intermittently appearing to write on a yellow pad or staring up at the ceiling.
The trial is scheduled to last from four to six weeks, and Matsumoto told potential jurors that it “promises to be interesting and educational.” More than 250 potential jurors were interviewed Monday and Tuesday, but not a single one was seated.
Prosecutors finally began presenting evidence Wednesday after seating a jury of 12, with six alternates, to decide the case.
With news trucks stationed outside and more than a dozen reporters flowing in and out of the courtroom, Shkreli is facing
intense media scrutiny. Citing negative news coverage of his client, Shkreli’s attorney on Tuesday requested a mistrial, which was denied. He also asked that reporters not be allowed to listen to potential jurors voice their opinions about Shkreli, which was also denied.
Court officers confiscated a copy of one of the New York tabloids that covered the first day of the trial from one of the potential jurors. “I think it’s impossible for jurors not to see them. I have someone who is facing 20 years in prison,” said his attorney, Benjamin Brafman.
Federal prosecutors alleged that for five years Shkreli lied to investors in two hedge funds and biopharmaceutical company Retrophin, all of which he founded. After losing money on stock bets he made through one hedge
fund, prosecutors said, Shkreli started another and used his new investors’ money to pay off those who had lost money on the first fund. Then, as pressure was building, Shkreli started Retrophin, which was publicly traded, and used cash and stock from that company to settle with other disgruntled investors, prosecutors contend.
But potential jurors appear to be struggling to separate Shkreli’s public persona with the charges he is facing. One juror told the judge that she had been in the health-care field for half her life and knew someone who used the AIDS medication whose price skyrocketed under Shkreli. “I have cried with them,” she said. “I don’t think I could be the right person to sit” on the jury. Even after advised by Matsumoto that Shkreli is not facing charges related to raising drug prices, the potential juror said she couldn’t be impartial and was excused.
Shkreli’s attorneys are preparing to argue that he was following the advice of his lawyer. His investors didn’t lose money and were not defrauded, they have argued.
“Shkreli did not defraud the investors and then make it up to them later with a different investment. This may be the Government’s view, but it’s not ours,” Brafman said in a court filing earlier this month. “At trial, the defendant will show that Mr. Shkreli never, at any time, intended for a single investor to lose a dime. Not in the short term; not in the long term; not ever.”