Martin Shkreli, the former chief executive of Retrophin Inc., has pleaded not guilty to a new charge of conspiracy. Shkreli was arrested last year for allegedly plotting to bilk the pharmaceutical company to cover up losses sustained by investors in his hedge funds. He was let go as CEO two years ago.
Shkreli had already been charged with seven counts of fraud and conspiracy. This latest charge of securities fraud conspiracy accuses him of not disclosing to the U.S. Securities and Exchange Commission that he owned certain Retrophin shares. Prosecutors claim that he concealed the fact that he was in control of a number of free trading or unrestricted shares in Retrophin by distributing the shares to contractors and employees so that the 5% ownership threshold, which would have required for him to notify the SEC, would not be triggered. Shkreli also is accused of allegedly telling employees to move chunks of their Retrophin shares to cover debts that he owed.
Also pleading not guilty to this latest charge is Shkreli’s ex-attorney Evan Greebel who was the outside counsel of Retrophin at the time of the alleged scheme. Greebel also faces numerous criminal charges.
The two men are accused of allegedly lying to investors about the poor performances of MSMB Capital Management, Elea Capital Management, and MSMB Healthcare, all hedge funds, from ’06 to ’12. They also allegedly took money from Retrophin to pay bad market bets of the MSMB funds.
Shkreli became infamous when, as CEO of Turing Pharmaceuticals AG, he increased the price of Daraprim, a drug used to treat a possibly fatal parasitic infection, by 5,000%. The price of the medication went from $13.50/pill to $750/pill.
Shkreli stepped down as Turing CEO after his recent arrest. The criminal charges against him are not related to his time with Turing.
In another high profile criminal case, a lawyer for Andrew Caspersen, the former Wall Street executive accused of running a Ponzi-like scam that bilked relatives, friends, and a hedge fund foundation of close to $40M, has an addiction to gambling. Caspersen told a judge that he is receiving treatment for mental health issues and his compulsive gambling habit.
Jaspersen pleaded not guilty to the securities fraud and wire fraud charges against him.
Pharma exec Martin Shkreli pleads not guilty to securities fraud, Los Angeles Times/AP, June 6, 2016
Andrew Caspersen, Charged in $40 Million Fraud, Had Gambling Addiction, Lawyer Says, The New York Times, June 14, 2016