“Poster boy for pharmaceutical price gouging” secured $5 million bond
Indicted former hedge fund manager and (now) former big-pharma chief Martin Shkreli made headlines again last week, this time for the unusual source of his jail bond collateral: an E-Trade account in his name worth eight digits or more.
“Here’s one guy who REALLY doesn’t want the stock market to tank any further—or he might get locked up” was the headline on the business news site CNBC.com.
The article went on to say, “Pharma bad boy Martin Shkreli has used his E-Trade brokerage account—which contained a cool $45 million as of Wednesday—to secure the $5 million bond that has kept him out of jail since mid-December,” when he was arrested on federal securities fraud charges.
“A magistrate judge in Brooklyn, New York, agreed to accept Shkreli’s account as collateral for the bond, but placed a number of tight restrictions on the deal. Shrekli had until Friday to determine what assets he wanted to use to secure his release
“The judge, Kiyo Matsumoto, barred Shkreli, any of his relatives, employees or other associates from selling off or transferring any of the holdings in the E-Trade account, or using the account to secure any other debt. Matsumoto also ordered E-Trade to let federal prosecutors in Brooklyn know if the assets in the account are valued at less than $5 million,” said the news site.
“Shkreli, 32, was arrested last month on charges related to his actions at the hedge fund he previously ran, and the pharmaceuticals firm, Retrophin, that he founded and ran until his ouster by the company’s board of directors in 2014.” Shkreli is accused of a sort of Ponzi scheme, where he allegedly used Retrophin funds to pay off investors whom he was suspected of defrauding at the hedge fund. In the January 7th, 2016 article, CNBC.com also called Shkreli “the poster boy for pharmaceutical price gouging.”
He is also accused of misrepresenting the amount of assets his fund had under management. The implication in the E-Trade revelation is that he may have been keeping ill-gotten gains “hidden in plain sight.”
Shkreli has denied all charges.
The former pharma boss gained notoriety in September, when it was published that his new company, Turing Pharmaceuticals, had jacked up the prices of a drug called Daraprim by more than 5,000 percent, from $13.50 per pill to $750.
It would take a leap of faith to believe that at least some of that profit didn’t go towards bailing himself out of jail. It’s certainly sad when someone bilks sick folks for prescriptions they require for survival and worse yet if those funds then go to helping the malefactor escape immediate consequences for yet more wrongdoing.
It would also be well to ask what could be done to make pharmaceutical corporations less attractive to hedge fund managers and other speculators.
In December, Shkreli was fired as CEO of KaloBios, another company he had bought recently. He resigned as Turing’s CEO after his arrest.