CEO Martin Shkreli, also known as “Pharma Bro,” was arrested Thursday for what U.S. prosecutors are calling a “Ponzi-like scheme” at his former hedge fund and a pharmaceutical company he previously headed. Shkreli was widely known for his monstrous actions of increasing the price of the drug
Daraprim, a decades-old drug used to treat toxoplasmosis, by
5,000%. Then earlier this week he again chose to put greed above all else when he increased the cost of yet another pharmaceutical drug by
99,900%. This one is used to treat
Chagas, a parasitic infection that can cause potentially lethal heart problems.
As these actions clearly upset just about everyone with a modicum of morality, Shkreli’s arrest was wholly unrelated. He has been charged with securities fraud, securities fraud conspiracy and wire fraud conspiracy. The maximum sentence for the top count is 20 years in prison. The 32-year-old was taking into custody at his Murray Hill, Manhattan apartment Thursday morning. According to
Bloomberg Business, the alleged was involved in a “complicated shell game” when he was a hedge fund manager for MSMB Capital Management and CEO of biotech firm Retrophin. This enabled him to make
“secret payoffs and set up sham consulting arrangements.”
Brooklyn U.S. Attorney Robert Capers said at a news conference that Shkreli,
“essentially ran his companies like a Ponzi scheme, where he used each subsequent company to pay off defrauded investors in the prior company.”
Evan Greebal, Shkreli’s lawyer, was also arrested the same morning on conspiracy charges. The Securities and Exchange Commission is expected to file civil charges similar to those of the federal prosecutors. The report stated:
“With the onslaught of federal charges and looming regulatory actions, Shkreli could be banned from running a public company.”
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