People in Illinois may be pleased to hear that Martin Shkreli, the CEO of Turing Pharmaceuticals who earlier in 2015 inspired the hatred of millions, was recently indicted for alleged securities fraud crimes. His current charges are not related to his raising the price of Daraphim from $13 per pill to $750 per pill, however.
Reportedly, Mr. Shkreli’s criminal charges were filed due to the manner in which he ran companies he formerly headed. According to the U.S. Attorney prosecuting the case, Mr. Shkreli is accused of providing fraudulent information to investors in MSMB Capital Management, a hedge fund, and Retrophin Inc., a biopharmeceutical company. Prosecutors allege that he provided false data to investors in MSMB to encourage investments in the company from them. He then used money from Retrophin to pay the debts he owed to the investors in MSMB.
Retrophin filed a lawsuit against Mr. Shkreli and is seeking $65 million. The company alleges that Mr. Shkreli took the funds to enrich himself. The Securities and Exchange Commission has also filed a federal lawsuit against Mr. Shkreli. In addition to him, an attorney who worked with him on the transactions was also arrested and charged. Mr. Shreli was able to post $5 million in bond following his arrest and arraignment.
Federal and state statutes impose severe penalties on white-collar crime convictions, including lengthy incarceration and high fines. People who have been charged with such offenses may find it advisable to meet with a criminal defense attorney as soon as possible so that a strategy can be developed in the event the case goes to trial.
Source: Reuters, “Vilified for drug pricing, CEO Shkreli busted for securities fraud,” Nate Raymond, Dec. 18, 2015.