Reviled drug CEO Martin Shkreli indicted by feds
NEW YORK — Pharmaceutical CEO Martin Shkreli, widely pilloried for jacking up the price of a drug used to treat AIDS patients, now faces federal criminal charges.
The charges do not relate to Turing Pharmaceuticals, the company that raised the price of the drug Daraprim by more than 5,000%.
Instead, the federal case centers on his time as CEO of Retrophin, another biotech company that ousted him last year. Details of the charges are to be disclosed at a noon press conference by Robert Capers, the U.S. Attorney in Brooklyn.
Retrophin has since sued Shkreli in federal court, seeking $65 million from him, accusing him of misusing the company’s cash and stock. He has denied those charges.
Bloomberg and Reuters reported that Shkreli was arrested Thursday at his home in New York. Reuters said it had “witnessed” the arrest.
An attorney who represented Shkreli in a previous civil lawsuit did not return calls seeking comment. A call to Shkreli’s office line went unanswered.
Turing, which Shkreli started after leaving Retrophin, is privately held.
But Shkreli recently bought a majority of the shares and become CEO of another small publicly-trade drug company, KaloBios, which develops cancer drugs.
Shkreli’s takeover of the firm sent shares soaring 400% on the first day after the news, and shares had since more than doubled in value. But they plunged 50% in premarket trading Thursday before trading was halted on reports of his arrest.
Shkreli had run a group of hedge funds, the MSMB Funds, before he started Retrophin in 2011.
In Retrophin’s lawsuit against Shkreli, it charged he used Retrophin’s assets, including shares of its stock, “to enrich himself, and to pay off claims of MSMB investors (who he had defrauded).” The suit says that the Securities and Exchange Commission opened an investigation into MSMB and Shkreli in 2012.
The drug price hike instituted by Shkreli at Turing brought widespread criticism in the media, which dubbed him “the most hated man in America,” as well as by politicians.
Democratic presidential candidate Bernie Sanders called him a “poster child of greed,” and refused to keep a $2,700 contribution Shkreli made to his campaign. But he also refused to return the money, giving it to a community health center instead.AlertMe