Martin Shkreli, CEO of Turing Pharma, which made headlines by raising the price of the 62-year-old drug, Daraprim (pyrimethamine) from $13.50 to $700 a tablet shortly after acquiring marketing rights in August of this year, has been arrested amid allegations of securities fraud and conspiracy involving his former hedge fund and the drugmaker Retrophin he founded in 2011.

Shkreli, who resigned as CEO following the arrest, is accused of siphoning off $11 million in assets from Retrophin – which fired him more than a year ago – to pay off defrauded investors from his failed hedge fund, MSMB Capital Management.

Federal prosecutor Robert Capers said Shkreli ran Retrophin and the hedge funds like a Ponzi scheme and a “personal piggy bank.”

The 32-year-old, who is free on $5 million bail, told the Wall Street Journal he was arrested for “raising the price of a life-saving drug,” adding that the arrest was “because of a social experiment and teasing people over the Internet.”

Capers, however, said the price increase – heavily criticized in the US, the only country, in which the drug recommended for treating the deadly parasitic infection toxoplasmosis is approved – did not play a role. Production costs are said to be about $1 per tablet.

The alleged crimes are said to have occurred between September 2009 and December 2012. Reports said Shkreli had used social media recently to promote his “cause,” and had also created a live stream of himself engaged in “mundane activities” such as playing chess and talking on the phone.

In late September, Turing announced it would drop the price of Daraprim again, but did not disclose by how much or when. More recently, Express Scripts, the biggest pharmacy benefits manager in the US, said it planned to list Imprimis Pharmaceuticals’ cheaper alternative to Daraprim for $1 per pill.

Amid the controversy, Shkreli acquired a majority stake in publicly traded drugmaker KaloBios Pharmaceuticals and became CEO of that company. On news of his arrest, the University of California’s Davis branch suspended a clinical trial sponsored by KaloBios pending the outcome of the investigation into its CEO.