“Pharma Bro” Ordered to Pay $7.4 Million
Martin Shkreli, who gained notoriety in 2015 for jacking up the price of Daraprim (pyrimethamine), a 62-year-old drug used to treat toxoplasmosis, has been ordered by a US federal judge to pay almost $7.4 million for defrauding investors in hedge funds he ran, as well as for a fraud scheme involving Retrophin, a drugmaker he founded.
The eccentric former CEO of Turing Pharmaceuticals, who called himself “Pharma Bro”, is currently serving jail time on the fraud charges. The 5000% rise in the price of the drug was legal.
Shkreli argued that he should not have to pay anything – or very little – for the crimes he is accused of because he derived no profit from them. Investors’ money went into the stock market, and the fund manager made no money from his plan to control Retrophin shares, his lawyers asserted.
During the trial, which he called “a witch hunt of epic proportions,” and in a YouTube video, Shkreli predicted that his penalty would be “close to nil.”
While defense lawyers noted that investors ultimately got their money back, the prosecution argued that they lost more than $20 million, as they were induced to put millions of dollars into Shrkreli’s two hedge funds, which operated essentially like Ponzi schemes, while he spent their money on personal expenses.
Among assets that may be confiscated to pay the fine are said to be a Picasso original painting, $5 million in Shkreli’s personal trading account, a one-of-a-kind special edition album by the Wu-Tang Clan and his shares in Vyera Pharmaceuticals, as Turing was renamed.
