Former hedge fund manager arrested on securities fraud charges

Date: Friday, December 18, 2015
Author: Associated Press

A boyish-looking entrepreneur who became the new face of corporate greed when he jacked up the price of a lifesaving drug fiftyfold was led away in handcuffs by the U.S. FBI on unrelated fraud charges Thursday in a scene that left more than a few Americans positively gleeful.

Martin Shkreli, a 32-year-old former hedge fund manager and relentless self-promoter who has called himself "the world's most eligible bachelor" on Twitter, was arrested in a grey hoodie and taken into federal court in Brooklyn, where he pleaded not guilty. He was released on US$5 million bail.

If convicted, he could get up to 20 years in prison. He left court without speaking to reporters. His attorneys had no immediate comment.

Online, many people took delight in his arrest, calling him a greedy, arrogant "punk" who gave capitalism a bad name and got what was coming to him. Some cracked jokes about lawyers jacking up their hourly fees 5,000 per cent to defend him in his hour of need.

Prosecutors said that between 2009 and 2014, Shkreli lost some of his hedge fund investors' money through bad trades, then looted Retrophin, a pharmaceutical company where he was CEO, for US$11 million to pay back his disgruntled clients.

Shkreli "engaged in multiple schemes to ensnare investors through a web of lies and deceit," U.S. Attorney Robert Capers said in a statement.

Shkreli was charged with securities fraud and conspiracy. A second defendant, lawyer Evan Greebel, of Scarsdale, New York, was charged with conspiracy and also pleaded not guilty.

A spokesman for Shkreli released a statement saying he denies the charges and "expects to be fully vindicated."

"It is no coincidence that these charges, the result of investigations which have been languishing for considerable time, have been filed at the same time of Shkreli's high-profile, controversial and yet unrelated activities," said spokesman Craig Stevens.

In September, Shkreli was widely vilified after a drug company he founded, Turing Pharmaceuticals, spent US$55 million for the U.S. rights to sell a medicine called Daraprim and promptly raised the price from US$13.50 to US$750 per pill.

The 62-year-old drug is the only approved treatment for toxoplasmosis, a rare parasitic disease that mainly strikes pregnant women, cancer patients and AIDS patients.