JURY FINDS “PHARMA BRO” SKRELI GUILTY

The Denver Post - - FRONT PAGE - By Renae Merle

Martin Skhreli, the for­mer phar­ma­ceu­ti­cal CEO no­to­ri­ous for a price­goug­ing scan­dal and for his snide “pharma bro” per­sona on so­cial me­dia, has been con­victed on fed­eral charges he de­ceived in­vestors in a pair of failed hedge funds.

NEW YORK » A Brook­lyn jury on Fri­day found Martin Shkreli, the for­mer hedge fund man­ager no­to­ri­ous for brazenly rais­ing the price of a crit­i­cal drug, guilty of de­fraud­ing his in­vestors.

Shkreli shook his head in ap­par­ent dis­be­lief as the first of three guilty ver­dicts was read. His father, who at­tended ev­ery day of the more than four-week trial, put his head in hands. Shkreli, who was ac­quit­ted on five other charges, faces up to 20 years in prison, though le­gal ex­perts say he is likely to be sen­tenced to much less.

The jury’s de­ci­sion, fol­low­ing five days of de­lib­er­a­tions, did not give ei­ther side the clear vic­tory they wanted, but was cer­tainly hum­bling for Shkreli who had boasted that pros­e­cu­tors would have to apol­o­gize to him when the case was over.

Yet with the au­dac­ity that has be­come his trade­mark, Shkreli met a scrum of re­porters out­side the court­house and said he was “de­lighted in many ways,” not­ing that he had been ex­on­er­ated on charges he con­sid­ered more se­ri­ous.

“This was a witch hunt of epic pro­por­tions,” he said. “Maybe they found one or two broom­sticks, but at the end of the day we were ac­quit­ted of the most im­por­tant charges in this case.”

Pros­e­cu­tors con­vinced the jury of five men and seven women that Shkreli, 34, mis­led in­vestors in two of his hedge funds, MSMB Cap­i­tal and MSMB Health­care. Shkreli lied in or­der to get their money and then to cover up mas­sive losses af­ter he made a bad stock bet, ac­cord­ing pros­e­cu­tors.

“Jus­tice was served,” said Brid­get Ro­hde, act­ing U.S. At­tor­ney for the East­ern Dis­trict of New York.

But the ju­rors did not find him guilty of one se­ri­ous charge: That Shkreli had looted a phar­ma­ceu­ti­cal he founded, Retrophin, of $10 mil­lion, to re­pay in­vestors.

Shkreli’s high-pow­ered at­tor­ney, Ben­jamin Braf­man, clung to the ac­quit­tal on that count as a vic­tory that he said ul­ti­mately could mean that Shkreli would serve lit­tle to no prison time. “We’re not 100 per­cent pleased, we’re 90 per­cent pleased,” said Braf­man. “The con­tro­versy around Martin, God bless him, did not help us.”

Shkreli’s in­famy hung over the more than month-long case, be­gin­ning with jury se­lec­tion when the judge strug­gled to find po­ten­tial ju­rors who didn’t al­ready dis­like the man known as “pharma bro.” He is best known for rais­ing 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, Shkreli didn’t shrink from the at­ten­tion but in­stead rel­ished in it by bat­tling naysay­ers on Twit­ter. He re­peat­edly flashed his fa­mous smirk while re­fus­ing to an­swer ques­tions at a con­gres­sional hear­ing on ris­ing drug prices.

Boost­ing drug prices was not why he was on trial, though the de­fense ques­tioned whether pros­e­cu­tors would have brought the case if not for Shkreli’s rep­u­ta­tion.

“Rarely has a white-col­lar crim­i­nal de­fen­dant evoked ha­tred and scorn from pub­lic in the way Shkreli has. Shkreli’s will­ing­ness to lie, step on peo­ple, flaunt his wealth and look down on oth­ers made him a vil­lain that many wanted to see go down in flames,” said James Good­now, an at­tor­ney with Fen­nemore Craig, a cor­po­rate de­fense firm.

Shkreli didn’t do him­self any fa­vor dur­ing the trial as he strug­gled to re­press his quirky in­stincts. As his at­tor­neys ar­gued his case, he squirmed in his seat and ap­peared bored. He re­port­edly read or­ganic chem­istry books and med­i­cal jour­nals to stay oc­cu­pied dur­ing some of the tes­ti­mony.

Early in the trial, U.S. Dis­trict Judge Kiyo Mat­sumoto chas­tised Shkreli for speak­ing with re­porters where ju­rors may hear him af­ter he strolled into a room full of me­dia and called the pros­e­cu­tors “ju­nior var­sity.” He stopped speak­ing to re­porters af­ter that but still popped up on Twit­ter, which banned him ear­lier this year, to tease them un­der an pseu­do­nym.

A more nu­anced im­age of Shkreli emerged dur­ing the trial. To the wealthy elite he courted, Shkreli was a savvy if ec­cen­tric Wall Street in­sider. In­vestors tes­ti­fied that they forked over money af­ter hear­ing from oth­ers that Shkreli was a “ris­ing star” in the hedge fund world, and were will­ing to dis­miss his quirks, even when he greeted one in­vestor in fluffy slip­pers and a stetho­scope. What pros­e­cu­tors char­ac­ter­ized as the cun­ning of a chronic liar, the de­fense called the odd­i­ties of a ge­nius.

Shkreli still faces civil charges from the Se­cu­ri­ties and Ex­change Com­mis­sion and a $65 mil­lion law­suit filed by Retrophin, which ousted him.

Still, an hour af­ter leav­ing the court­room, Shkreli was back where he feels com­fort­able: At home in a room full of mu­sic equip­ment where he livestreams his life.

“I think I can get pro­ba­tion. I think there’s a de­cent chance,” he said with a beer in his hand and still wear­ing the polo shirt and glasses he wore to court.

Drew Angerer, Getty Im­ages

Martin Shkreli speaks to the me­dia Fri­day af­ter a jury in fed­eral court in Brook­lyn found the for­mer hedge fund man­ager guilty on three counts in­volv­ing se­cu­ri­ties fraud and con­spir­acy to com­mit se­cu­ri­ties and wire fraud.

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