Former pharmaceutical CEO convicted of fraud
Known for raising price of life-saving drug, government says he deceived investors
NEW YORK - Martin Shkreli, the eccentric former pharmaceutical CEO notorious for a price-gouging scandal and for his snide “Pharma Bro” persona on social media, was convicted Friday on federal charges he deceived investors in a pair of failed hedge funds.
A Brooklyn jury deliberated five days before finding Shkreli guilty on three of eight counts. He had been charged with securities fraud, conspiracy to commit securities fraud and conspiracy to commit wire fraud.
Outside the Brooklyn courthouse afterward, Shkreli called his prosecution “a witch hunt of epic proportions” but conceded that maybe the government had found “one or two broomsticks.”
Within an hour of leaving the court, Shkreli was at home live-streaming on YouTube and calling the split verdict a victory, despite his conviction on two of the most serious counts.
Prosecutors had a different take.
“There’s one statement that’s most important and that’s the jury’s statement: guilty on those counts,” said Acting U.S. Attorney Bridget Rohde.
Prosecutors had accused Shkreli of repeatedly misleading investors about what he was doing with their money. Mostly, he was blowing it with horrible stock picks, forcing him to cook up a scheme to recover millions in losses, they said.
Shkreli, 34, told “lies upon lies,” including claiming he had $40 million in one of his funds at a time when it only had about $300 in the bank, Assistant U.S. Attorney Alixandra Smith said in closing arguments.
But the case was tricky for the government because investors who testified said Shkreli’s scheme actually succeeded in making them richer, in some cases doubling or even tripling their money on his company’s stock when it went public.
“Who lost anything? Nobody,” attorney Ben Brafman said in his closing argument.
For Shkreli, one of the biggest problems was not part of the case — his purchase in 2014 of rights to a life-saving drug for which he promptly raised the price from $13.50 to $750 per pill. Several potential jurors were kept off the panel after expressing disdain for the defendant, with one calling him a “snake” and another “the face of corporate greed.”
No sentencing date was set.