Breaking News: Martin Shkreli has been arrested in a securities fraud case.
Dubbing him “the most hated man in America,” BBC reports that Martin Shkreli, the 32-year-old chief executive of Turing Pharmaceuticals, “has been called a ‘morally bankrupt sociopath,’ a ‘scumbag,’ a ‘garbage monster,’ and ‘everything that is wrong with capitalism,’” adding that “those are some of the tamer comments.”
He has been criticized, jointly, by the Infectious Diseases Society of America and the HIV Medicine Association as well as by the Pharmaceutical Research and Manufacturers of America.
Democratic presidential front-runner Hillary Clinton tweeted about his “outrageous” form of “price-gouging,” while Donald Trump called Shkreli a “disgrace” and his actions “disgusting.”
In a breaking new development, The New York Times reports that: Shkreli was arrested Thursday morning by the federal authorities.
The investigation, in which Mr. Shkreli has been charged with securities fraud, is related to his time as a hedge fund manager and running the biopharmaceutical company Retrophin — not the price-gouging controversy that has swirled around him.
According to The New York Times report, “He was arrested in his Midtown Manhattan apartment, according to a law enforcement source, who declined to be identified because the indictment had not been unsealed. Federal prosecutors in Brooklyn were expected to hold a news conference on the charges later Thursday.” The Times also reports that: “Evan L. Greebel, a corporate lawyer at Kaye Scholer who has worked with Mr. Shkreli, was also arrested on Thursday morning.”
According to The New York Times, “In 2011, while running the hedge fund MSMB Capital Management, Mr. Shkreli started Retrophin, which adopted a controversial business strategy that has come under scrutiny. It acquired old, neglected drugs often used for rare diseases and substantially raised their prices. Retrophin, for example, raised the price of Thiola, used to treat a disease that causes kidney stones, to $30 a pill from $1.50. In 2012, he took Retrophin public through a merger with a publicly traded shell company.”
The federal charges are believed to parallel a civil lawsuit filed against Mr. Shkreli in August by Retrophin, whose board ousted Mr. Shkreli as chief executive in September 2014. In its lawsuit, Retrophin accused Mr. Shkreli of having used the company as a kind of personal piggy bank to help pay off upset investors who lost money at the hedge fund MSMB. Among the ways he did this, the lawsuit says, was by hiring some of these investors as sham consultants to Retrophin.
For those unfamiliar with the back story, Shkreli is the hedge fund manager who took the price of Daraprim from $13.50 a pill to $750 back in September of this year. That’s a price hike of 5555.56%. When confronted about it, Shkreli’s attitude was: What do you care? You’re not paying for it. Your insurance company is.
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