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.

Filed Under: arrested, martin shkreli, securities fraud
Companies: retrophin, turing pharmaceutical


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  • identicon
    Anonymous Coward, 17 Dec 2015 @ 6:33am

    I hope he's sharing a cell with one of the people or relatives of a family member he recently screwed , In a perfect world that would be justice.

    reply to this | link to this | view in chronology ]

    • icon
      Richard (profile), 17 Dec 2015 @ 6:43am

      Re:

      I hope he's sharing a cell with one of the people or relatives of a family member he recently screwed

      I wouldn't wish any of them to be in prison let alone having to share a cell with him!

      reply to this | link to this | view in chronology ]

  • icon
    Richard (profile), 17 Dec 2015 @ 6:40am

    Santa

    Santa has been at work and Shkreli is definitely on the "Naughty" list. (He checked it twice - once for Daraprim and once for Fraud).

    reply to this | link to this | view in chronology ]

  • icon
    PaulT (profile), 17 Dec 2015 @ 6:40am

    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.

    reply to this | link to this | view in chronology ]

  • icon
    That Anonymous Coward (profile), 17 Dec 2015 @ 6:49am

    Is it just me or is the fact he called out the Wu-Tang Clan in the press just before this happened worrying about how deep into the Government the Wu-Tang Clans reach is?

    http://www.nme.com/news/wu-tang-clan-0/90387

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 17 Dec 2015 @ 6:56am

    Now is the perfect opportunity for Bill Murray to steal back the Wu Tang album.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 17 Dec 2015 @ 7:15am

    Bad art is still art, but we just won't be hanging this one on the fridge any time soon.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 17 Dec 2015 @ 7:18am

    "getting what's owed"

    He should absolutely be punished for illegal activity, but for his legal yet scummy actions the emphasis should be on fixing the broken system not finding a scapegoat. As long as the framework exists, a new Shkreli can pop up at any time.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 17 Dec 2015 @ 7:26am

    Shkrelifreude!

    Couldn't happen to a nicer person --er, I mean punkarse spoiled misfit brat. He can guard his WuTang album from his prison cell.

    Ho ho ho, PharmaBro!

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 17 Dec 2015 @ 7:35am

    While I'm pleased to see this turn of events, Shkreli is low-hanging fruit for the government to prosecute.

    The bigger challenge will be to challenge the pharmaceutical companies - and their campaign donations/lobbyist armies - for the same behavior.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 17 Dec 2015 @ 10:14am

      Re:

      Those campaign donations/lobbyist armies are what makes the collosal pharma health insurance milking scam possible.

      reply to this | link to this | view in chronology ]

  • identicon
    Adam, 17 Dec 2015 @ 7:38am

    That's not art!

    You can't retroactively call something art, there has to be some artistic intention beforehand.

    reply to this | link to this | view in chronology ]

  • icon
    Jeremy2020 (profile), 17 Dec 2015 @ 7:59am

    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.

    reply to this | link to this | view in chronology ]

    • icon
      PaulT (profile), 17 Dec 2015 @ 11:31pm

      Re:

      "instead of"

      While I agree with the sentiments, why is it always somehow impossible for people to do both things? It's quite possible for the problems to be fixed while you lock Shkreli up.

      You just have to continue to demand action from your government rather than being placated by the sacrificial idiot.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 17 Dec 2015 @ 8:13am

    For Shkreli's own good we are increasing the penalty from $10 million to $555 million and jail time to 277 years.

    This will allow us to create a better version of the existing framework to ensure all SEC violators are treated fairly and their constitutional rights remain intact.

    - SEC Commissioner

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 17 Dec 2015 @ 10:43am

      Re:

      "For Shkreli's own good"

      No no no no, do it for the sake of art. After all it gets people talking.

      reply to this | link to this | view in chronology ]

    • icon
      PaulT (profile), 17 Dec 2015 @ 11:33pm

      Re:

      "For Shkreli's own good we are increasing the penalty from $10 million to $555 million and jail time to 277 years."

      Nah, he committed massive financial fraud and morally unacceptable robbing from sick people. It's not like he illegally copied an MP3 or anything...

      reply to this | link to this | view in chronology ]

  • identicon
    Zxanth, 17 Dec 2015 @ 8:17am

    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...

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 17 Dec 2015 @ 9:40am

      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!

      reply to this | link to this | view in chronology ]

  • identicon
    Capt ICE Enforcer, 17 Dec 2015 @ 8:28am

    Merry Christmas Everyone

    This is a Christmas gift for everyone.

    reply to this | link to this | view in chronology ]

  • icon
    Mike Masnick (profile), 17 Dec 2015 @ 10:26am

    Indictment

    FWIW, I just added the indictment to the bottom of the post if you'd like to check out the details...

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 17 Dec 2015 @ 10:41am

    "raising prices ... that’s what art is."

    Too bad I own the copyright on this art of yours. Now pay me because you are infringing on my right to raise prices.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 17 Dec 2015 @ 11:06am

    "At the end of the day, that’s what art is."

    Looking forward to the bad reviews of Shkreli's very own debut starring courtroom performance, and to the sequel - a performance art installation held in a small room with limited tickets available.

    Not to prejudge anything of course.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 17 Dec 2015 @ 11:12am

    If there is any poetic justice

    in the world, this dirtbag will contract HIV in prison, lose his money, then come to rely on the daraprim who's price he jacked through the ceiling.

    reply to this | link to this | view in chronology ]

  • icon
    Uriel-238 (profile), 17 Dec 2015 @ 11:13am

    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.

    reply to this | link to this | view in chronology ]

    • identicon
      Jack, 17 Dec 2015 @ 1:38pm

      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.

      reply to this | link to this | view in chronology ]

      • icon
        Uriel-238 (profile), 17 Dec 2015 @ 10:42pm

        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?

        reply to this | link to this | view in chronology ]

        • icon
          PaulT (profile), 17 Dec 2015 @ 11:53pm

          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.

          reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 17 Dec 2015 @ 11:34am

    Does the Internet have Aids?

    If not, then just how is this a present for the internet?

    reply to this | link to this | view in chronology ]

  • icon
    Mike Shore (profile), 17 Dec 2015 @ 11:51am

    5000% increase

    Hopefully his lawyers decide to increase their rates by 5000%

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 17 Dec 2015 @ 1:26pm

    Wow...

    More hated than Comcast? That's quite an accomplishment.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 17 Dec 2015 @ 1:30pm

    Looks like he's a pedo in the making too

    I hope he's off the streets for a long time!

    Here’s a Video of Pharma Creep Martin Shkreli Flirting With Teens Online
    http://gawker.com/here-s-a-video-of-pharma-creep-martin-shkreli-flirting-1748338016

    reply to this | link to this | view in chronology ]

  • icon
    Eldakka (profile), 17 Dec 2015 @ 3:08pm

    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.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 17 Dec 2015 @ 4:27pm

    That sound you hear is antidirt, out_of_the_blue and Whatever stamping their feet in the corner.

    reply to this | link to this | view in chronology ]

  • icon
    GEMont (profile), 18 Dec 2015 @ 4:40pm

    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.

    ---

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 22 Dec 2015 @ 2:45pm

    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.

    reply to this | link to this | view in chronology ]


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