Skip to main content

FBI Arrests Martin Shkreli On Fraud Charges, Because Karma Isn't A Statute

The hedge fund manager turned pharma CEO should have "turned" more carefully.

America's most hated pharma bro is likely wishing that he had an extra $2 million laying around for bail money right about now.

A boyish drug company entrepreneur, who rocketed to infamy by jacking up the price of a life-saving pill from $13.50 to $750, was arrested by federal agents at his Manhattan home early Thursday morning on securities fraud related to a firm he founded.

Wait, we know that guy!

Martin Shkreli, 32, ignited a firestorm over drug prices in September and became a symbol of defiant greed. The federal case against him has nothing to do with pharmaceutical costs, however. Prosecutors in Brooklyn charged him with illegally taking stock from Retrophin Inc., a biotechnology firm he started in 2011, and using it to pay off debts from unrelated business dealings. 

Oh Martin, is this where you got the money for that emo label? Is this how you were going to remunerate your ex-girlfriend for some nostalgic nookie?

In the case that closely tracks that suit, federal prosecutors accused Shkreli of engaging in a complicated shell game after his defunct hedge fund, MSMB Capital Management, lost millions. He is alleged to have made secret payoffs and set up sham consulting arrangements.

Well this does explain Martin's seemingly desperate yearn to price-gouge. He needed all that revenue after learning that was a terrible hedge fund manager.

How terrible?

Retrophin sued Shkreli in August for misuse of company funds, claiming he engineered numerous transactions between investors in MSMB and the biotechnology firm. Similar allegations are laid out in the company's regulatory filings.
The company alleged in a complaint filed in Manhattan federal court that, through a disastrous trade with Merrill Lynch in 2011, Shkreli cost MSMB more than $7 million, leaving it virtually bankrupt.
Retrophin also asserts that Shkreli entered into payoff agreements with as many as 10 MSMB investors who lost money when the hedge fund became insolvent. Shkreli paid some investors through fake consulting agreements and others through unauthorized appropriations of stock and cash, the company alleged.


Understandably, Shkreli's lawyer was also arrested this morning while shares of KaloBios (KBIO) - which Shkreli recently took majority control of - plunged more than 50% in early trading.

While we're loath to offer anyone advice, we will break from tradition and tell Martin that during his time in Brooklyn's federal holding cells, he would be wise to not make any offers to "smash that" or share his thoughts about the future of modern music. You know, like this one:

Hang in there, Martin...

The Securities and Exchange Commission, which according to court documents opened an investigation into Shkreli in 2012, is expected to file a parallel civil complaint against him, according to people familiar with the matter.

Or don't.

Shkreli, CEO Reviled for Drug Price Gouging, Arrested on Securities Fraud Charges [Bloomberg]


Desperate Pharmaceutical Company Hits Rock Bottom, Names Martin Shkreli CEO

Everyone's favorite price-gouging emo-rapping hedge fund-dropout is now CEO of a publicly-traded company.

It Turns Out That The Feds Have Been Onto Martin Shkreli For Years

Martin is a victim of what he did last year, and he has been for years...

Martin Shkreli Can't Shut Up About Shutting Up

Maybe M-Shkrels should make "Pleading The Fifth" into a lifestyle.

Bored Feds Now Contemplating Charging Martin Shkreli With All The Crimes

Looks like Martin is going to need to find a dope rhyme for "Securities fraud."

Martin Shkreli Can't Stop Getting Charged By The Feds

That brings Martin's grand total to far.