Friday, August 4, 2017

‘Pharma Bro’ Martin Shkreli convicted in fraud trial

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“The Most Hated Man in America” just got a little more reviled.
A Manhattan jury found notorious “Pharma Bro” Martin Shkreli guilty Friday of defrauding investors in what prosecutors described as an $11 million Ponzi scheme.
The jury of seven women and five men took about four and a half days to return the verdict, finding him guilty of three of the eight counts against him: two counts of securities fraud and conspiracy to commit securities fraud.
Each of the first two counts carries a potential prison sentence of up to 20 years. The conspiracy to commit securities fraud charge carries a prison term of up to five years.
Prosecutors in Brooklyn federal court mounted an exhaustive five-week case against the 34-year-old former drug-company CEO, accusing him of draining funds from his firm Retrophin to pay off investors of his failed hedge funds,MSMB Capital Management and MSMB Healthcare.
Shkreli — who once bragged about jacking up the price of a life-saving AIDS drug by 5,000 percent, earning him disgust around the world — faces up to 20 years behind bars when he’s sentenced.
He was acquitted of three charges of conspiracy to commit wire fraud and two charges of conspiracy securities fraud — the counts that accused him of siphoning Retrophin funds to repay hedge fund investors.
Shkreli quietly exclaimed “Yes!” to himself as he learned he was acquitted of Count 7, conspiracy to commit wire fraud, the charge directly related to the Retrophin-looting allegations.
He rolled his eyes and gave an unimpressed smirk to the 12 jurors as each of the three guilty verdicts were read.
Prosecutors called a steady stream of investors, accountants and former employees to take the stand against the often distracted, always tie-less Shkreli.
Unexpected peeks into the smirking loudmouth’s personal life emerged during the otherwise dry securities-fraud trial, including a surprise gander into his sex life — with details from conversations with a gay pal and investor suggesting Shkreli was contemplating romps with men.
Investor Steven Richardson said he believed Shkreli was lying about his interest in gay sex to to get close to him — and told jurors he confronted Shkreli by bringing him into Richardson’s own bedroom and sitting him down on the bed for a chat.
Shkreli’s lawyer, Ben Brafman, eventually confronted Richardson with questionably flirtatious e-mails that the investor had written his client.
“Only if I get to touch your soft skin,” Richardson wrote Shkreli late one night after Shkreli asked if he wanted to get together for dinner to discuss a failed drug trial.
Shkreli didn’t respond, and a half hour later, Richardson e-mailed “I’m drunk where are you.”
Brafman unsuccessfully attempted to paint Richardson as a creepy older gay man who spent two years trying to “seduce” Shkreli — and then pushed him off the board of his drug company, Retrophin, because he didn’t fit the traditional image of a CEO.
In his opening statements, the top defense lawyer portrayed Shkreli as a misunderstood yet scintillating genius whose idiosyncrasies — such as wearing the occasional pair of bunny slippers and stethoscope to work — got him booted by close-minded old men.
Yet Richardson, and current Retrophin CEO Stephen Aselage, said Shkreli was asked to step aside amidst Shkreli’s questionable antics — including hiring private eyes to spy on his staffers and tweeting about stock info that had not yet been made public.
While investors begrudgingly agreed with Brafman’s repetitive characterizations of Shkreli as a “superhuman genius,” he was likened to the Pied Piper and Dustin Hoffman’s autistic savant character in the flick “Rain Man.” They mostly focused on how Shkreli strung them along, losing their money, all the while sending them false statements asserting growth.
The Brooklyn-born loudmouth’s scheme started when he began luring financiers into investing in his hedge fund, MSMB Capitol, telling them it was valued around some $100 million, when in reality the fund’s bank accounts contained a mere $330.
Over time, he rolled the money through a series of MSMB entities, getting more investors as he lost the money in bad trades, and funneled the funds into his budding pharmaceuticals company, Retrophin.
As MSMB investors started demanding their money back, a panicked Shkreli starting paying them off with Retrophin funds through a series of settlement and consulting agreements.
After Shkreli was tossed from Retrophin, he created Turing Pharmaceuticals. Turning acquired the rights to a drug used by AIDS patients, and Shkreli became a household name when he arbitrarily hiked the drug price from $13.50 to $750 per pill.
Despite having nothing to do with securities, the price-gouging scandal came front and center early on, when lawyers had trouble even seating jurors in the case.
During the first day of jury selection, venomous potential jurors lashed out at Shkreli as a “snake,” “evil” and even a “dick.”

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