Merry Christmas Internet! Turing CEO Martin Shkreli Arrested on Securities Fraud

from the goes-around-comes-around dept

In a bit of an early Christmas present for the Internet, Turing Pharmaceuticals CEO Martin Shkreli was arrested early Thursday morning for securities fraud (less than a day after Bloomberg had a big article about what a stock trading savant he was). According to reports, the Internet’s least favorite human being had been under investigation since January for illegally taking stock from a biotechnology company he started in 2011 (Retrophin) to pay off unrelated debts, using a number of shell companies:

“…federal prosecutors accused Shkreli of engaging in a complicated shell game after his defunct hedge fund, MSMB Capital Management, lost millions. He is alleged to have made secret payoffs and set up sham consulting arrangements. A New York lawyer, Evan Greebel, was also arrested early Thursday. He’s accused of conspiring with Shkreli in part of the scheme.”

Turing and Shkreli came to fame for raising the price of Daraprim, the preferred treatment for a parasitic condition known as toxoplasmosis, some 5000% (from $13.50 to $750 per pill). After the much maligned CEO then appeared to backpedal and promise a price reduction for the drug, Turing released a highly dodgy press statement right before the Thanksgiving holiday making it abundantly clear that wouldn’t be happening. On a positive note, Shkreli’s behavior has prompted a much-needed examination of pharmaceutical industry business practices, and specifically the practice of jacking up prices on previously inexpensive generics.

Shkreli’s name then remained in the headlines after it was discovered he’d purchased the only copy of the Wu-Tang Clan album Once Upon a Time in Shaolin for the rock-bottom price of $2 million — months before his rise to “fame.” And in a recent interview on the album’s purchase, Shkreli tries to vaguely imply that the entire Turing pharmaceutical shit show has been performance art:

“To me, what I?m doing right now in the media,? Shkreli continues, ?raising prices, all this shit, believe what you want, but it?s interesting. It gets people talking. At the end of the day, that?s what art is.

Well, maybe less like art and more like bad fiction. Bad fiction about a greedy toddler getting what’s owed, and just in time for the holiday season.

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Companies: retrophin, turing pharmaceutical

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Comments on “Merry Christmas Internet! Turing CEO Martin Shkreli Arrested on Securities Fraud”

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47 Comments
PaulT (profile) says:

Be it for art or greed, he’s gaming a broken system at the expense of peoples’ health, and even lives. He’s part of a small group of people causing real harm every single day, it’s just that his arrogance has shone a light on how bad it is in the US for once.

May he face the largest possible punishment for his legal crimes, because I fear there’s not enough available for the moral crimes of he and his cronies.

Jeremy2020 (profile) says:

It’s much easier for the government to arrest Shkreli and make some nice headlines about it to show they’re doing something instead of fixing the problem which could make the absurdly obscene profits of pharma companies only be obscene.

He’ll also go do a couple years in Club Med White Collar prison and walk out and still have millions that he’s hidden somewhere or just do it all over again. Maybe start a speaking tour.

Zxanth (profile) says:

Arrest.. Here is the sad truth

I am very glad this guy got arrested, HOWEVER, the truth of the matter is even if he gets convicted he will be sent off to a low security vacation prison for like 2-5 years, then let out, He will still have all of his money and likely be able to live a life of luxury…

These people should be subjected to a forced life of poverty, but even now the elite are trying to make the laws even more lenient to white collar crimes…

Anonymous Coward says:

Re: Arrest.. Here is the sad truth

…He will still have all of his money…

Wait…one can have their assets seized and forfeited without being charged with anything yet this guy has been arrested for financial impropriety(ies) and can keep that money (assuming he’s convicted)???

And I thought copyright and trademark laws were screwy!

Uriel-238 (profile) says:

A true Christmas gift would be to get these people their meds.

Is there a way to use this fraud charge to drop the HIV treatment drug to the public domain? And to guarantee it to all who need it at cost?

The next step is to fix the system so that all rarely-needed drugs are available without gouging, but that’s a stone too big to fit on Santa’s Sleigh, I think.

Jack says:

Re: A true Christmas gift would be to get these people their meds.

It’s over 60 years old and has been off patent forever. Anyone can make this drug and sell it as a generic. The problem is, nobody has ever found it profitable to make a generic because there isn’t a big market and Daraprim was a reasonable-ish price.

There is no patent to take away.

Uriel-238 (profile) says:

Re: Re: See. This could come true after all.

How difficult would this stuff be to make? Is there horse urine or pig insulin involved?

IANAP so I don’t have any idea of the starting capital we’d need to make a non-profit factory that produced the stuff and sold it at exact cost.

Is it even feasible? Are we talking ten million dollars here?

Can it be Kickstarted?

PaulT (profile) says:

Re: Re: Re: See. This could come true after all.

Fortunately, the “free market” stepped in this time and a rival company offered the drug at a sane price: http://www.iflscience.com/health-and-medicine/rival-company-offers-1-alternative-pill-martin-shkreli-s-750-hiv-medication. It’s not FDA approved, but it’s the same drug AFAIK.

Generally speaking, however, the way I understand it is that there are major costs in setting up a production for a drug like this, which is why there was such a captive market in the first place. It’s also worth noting that Shkreli only bought the US marketing rights for the drug. It’s available elsewhere at reasonable prices as you can see on the Wiki entry: https://en.wikipedia.org/wiki/Pyrimethamine#Availability_and_price. So, for whatever reason it seems that a US-based production facility is required rather than import from, say, the UK stock being allowed, and Shkreli bought himself a monopoly in the US.

So, while there’s an altruistic company producing the pills for the US market, any community organisation is best targeted at fixing the parts of the system that caused this issue in the first place.

Eldakka (profile) says:

wow that was quick

It’s already on the Wu-Tang Clan Wikipedia page https://en.wikipedia.org/wiki/Wu-Tang_Clan#The_Wu_-_Once_Upon_A_Time_In_Shaolin:

The album was sold through Paddle8, an online auction house, for $2 million to Martin Shkreli, a CEO of Turing Pharmaceuticals, who is notorious for purchasing the maker of toxoplasmosis drug Daraprim and increasing the price of the drug from $13.50 a pill to $750 a pill.[72] THe FBI arrested Martin Shkreli on Thursday, December 17, 2015 on charges of “widespread” securities fraud.

GEMont (profile) says:

Time Line

2015
Shkreli arrested for mulitple security fraud and ponzi scheme crimes.

2015
Shkreli released on 5 million dollar bond.

2016
Shkreli security fraud ponzi-scheme case goes to court.

2016
Shkreli found guilty on all charges and fined 8 million dollars, (which is the government’s 10% cut of his 8 billion dollar security fraud and ponzi-scheme profits), and 200 hours of community service.

2016
Shkreli goes back to life of crime and price gouging, none the worse for wear. Raises prices on 5 other life-saving drugs to replace the government pay-off lost in court case, and to pay off the hundreds of rich screaming suckers he defrauded in his many ponzi schemes.

2016
Shkreli completes 200 hours of community service in 2 days by hiring 10 vagrants to hand out aspirin to other vagrants.

2018
Public short term memory limit reached.

2020
Shkreli wins Nobel Peace Prize for his life-saving pharmaceutical goodmanship. When asked what lesson he learned form the whole situation, the billionaire philanthropist replied;

“Always cut the government in for a piece of the action because they’ll take you to court and squeeze their cut out of you anyway if you don’t, and that’s just embarrassing.”

I mean, really, like anyone expects the DOJ to drop a real poop-bomb on any corporate crook. Shkreli will walk away from this debacle virtually unscathed, unrepentant, and a very rich man.

Guaranteed.

Anonymous Coward says:

His YouTube channel

I subscribed to his YouTube channel after finding out he was doing frequent live streams just to see if he’d do any more post-arrest (not that I cared to actually see one). The channel was called Martin Shkreli. I didn’t watch these either, but this weekend 2 videos were posted and his channel name had been changed to Martin Ni**er. Now it’s been renamed back to Martin Shkreli.

I bet without the scruff on his face he’d look even more like the immature child that he is.

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