Martin Shkreli, who rocketed to infamy by jacking up the price of a life-saving pill from $13.50 to $750 this fall was arrested by federal agents at his Manhattan home early Thursday morning on securities fraud related to a firm he founded.
Shkreli ignited a firestorm over drug prices in September, caught the attention of Presidential candidates, and became a symbol of the worst side of Big Pharma. However, the federal case against him has nothing to do with pharmaceutical costs. Prosecutors in Brooklyn charged him with illegally taking stock from Retrophin Inc., a biotechnology firm he started in 2011, and using it to pay off debts from unrelated business dealings. He was later ousted from the company, where he’d been chief executive officer, and sued by its board.
In the case that closely tracks that suit, 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.
Retrophin replaced him as CEO “because of serious concerns about his conduct,” the company said in a statement. The company, which hasn’t been accused of any wrongdoing, has “fully cooperated with the government investigations into Mr. Shkreli.”
Shkreli’s lawyer didn’t immediately respond to requests for comment. Spokeswomen for Kaye Scholer LLP, where Greebel works, and Brooklyn U.S. Attorney Robert Capers declined to comment. Capers will discuss the case at a press conference Thursday in Brooklyn.