Martin Shkreli decries his arrest and charges of securities fraud on basis that he was singled out
“Martin Shkreli believes he became a target for authorities after raising the price of a lifesaving drug,” reported Fortune.com on December 21st. The notorious, price-jacking pharma chief who posted a $5 million bond the same day as his arrest will find few patients or doctors sympathetic to the cries from his plush Manhattan apartment.
The now ex-CEO of KaloBios (he was fired three days after his arrest) and ex-CEO of Turing Pharmaceuticals faces numerous charges of securities fraud unrelated to what many have called price-gouging policies. “The Securities and Exchange Commission had been investigating him since 2012 regarding a hedge fund he managed,” the Wall Street Journal reports. “The SEC complaint includes claims that Shkreli exaggerated the fund’s performance to investors and used stock from the firm to pay off unrelated debts,” adds Fortune.
The indictment doesn’t cite his decision to raise drug prices by 5,000%, but Shkreli told the Journal in an interview he believes that’s what made him a target. “Trying to find anything we could to stop him,’ was the attitude of the government. Beating the person up and then trying to find the merits to make up for it,” Shkreli said, rather awkwardly.
In the interview, Shkreli stood by his decision to increase prices, but admitted that he could have been more patient in explaining the move and less provocative in the wake of criticism. He said he now plans to focus on toning down the persona he created and show everyone “the real Martin Shkreli.” That the real Martin Shkreli may be confined to a prison cell a few months from now is a possibility the 32-year-old seems, at least for now, unwilling to consider.
In explaining the indictment, an FBI official told the Journal that Shkreli had practiced “a securities fraud trifecta of lies, deceit and greed.”
Fortune.com says, “If convicted, he could be sentenced to 20 years in prison, but the charges have already had an effect. Two institutions halted a drug trial over the weekend that was sponsored by KaloBios Pharmaceuticals Inc., where Shkreli was the CEO until he was fired on [the 21st].”
“KaloBios shares plummeted 53 percent on December 17th after Shkreli was arrested in New York on charges related to one of his previous companies, Retrophin Inc. The trading was halted that day and hasn’t resumed. Last weekend, the University of California at Davis and Moffitt Cancer Center in Florida said they had suspended a planned drug trial sponsored by KaloBios,” according to the Seattle Times.
“Last month, Shkreli bought a majority interest in KaloBios and named himself CEO. The company’s stock was trading at less than $1 before he made the move, and it subsequently rose to as high as $39.50, giving the company a market value of more than $100 million,” added the Seattle daily.
The fates of both Turing and KaloBios are now in doubt, as the FBI and SEC prepare to unravel Shkreli’s alleged misdeeds before judges and jurors. The boyish entrepreneur might end up inadvertently helping consumer and patient advocates, by putting a face to big pharma’s sometimes ravenous greed.