Jury Selection Underway in Securities Fraud Case Against Ex-Hedge Fund Manager and Pharmaceutical CEO Martin Shkreli

At the Federal District Court in Brooklyn, former hedge fund manager Martin Shkreli is on trial for multiple counts of securities fraud and wire fraud. Just this Monday, over 120 potential jurors were dismissed for various reasons. A number of them, through their statements, revealed that they could not be impartial, with some blaming Shkreli for problems involving the pharmaceutical industry, including that his actions had directly impacted them and/or their loved ones.

For example, one potential juror said that both of his parents now struggle to pay for their daily medical care after Shkreli raised the price of Daraprim from $13.50/pill to $750/pill overnight. The drug is used to treat parasites and has also been used for babies and AIDS patients suffering from infection. At the time of the price hike, Shkreli was running Turing Pharmaceuticals.

This criminal securities fraud case, however, is not about his time at Turing. Shkreli is accused of using the assets of Retrophin, a biotech company, in a Ponzi-like fraud when he was its CEO and of robbing investors of over $11M.

According to federal officials, Shkreli used funds from Retrophin to pay his MSMB Capital hedge fund’s investors after several of them threatened to sue him in 2013. He and attorney Evan Greebel allegedly used $3.4M in Retrophin money and stock to resolve the claims even though the biotech company did not have any responsibility to the plaintiffs.

The two of them are also accused of generating fraudulent consulting agreements for investors so that they could be paid in a manner that wouldn’t upset an auditor. Retrophin’s board never approved these consulting agreements, through which they paid the hedge fund investors $7.6M in stock and cash.

Retrophin fired Shkreli in 2014. The company sued him, making the same allegations as those in this criminal case against him.

Securities Fraud Cases
Even if prosecutors and/regulators have brought a securities fraud case against the firm or financial manager that you believe is responsible for your investment losses, it is still important that you bring your own securities claim if you want to maximize your chances for recovery. Contact our hedge fund fraud lawyers at The SSEK Partners Group today.

Jury Selection in Martin Shkreli Trial Begins With Name Calling, NY Times, June 26, 2017

Martin Shkreli’s fraud trial begins, CNN, June 26, 2017

‘Pharma Bro’ Martin Shkreli, detested CEO who jacked up price of AIDS pill, arrested on securities fraud charges, Daily News, December 17, 2015