Yahoo – AFP,
Thomas Urbain, December 17, 2015
New York (AFP) - A reviled US pharmaceutical boss who caused a storm in September by jacking up the price of a life-saving drug by 5,000 percent was arrested Thursday on fraud charges, prosecutors said.
Martin Shkreli (C) leaves the federal court in New York on December 17, 2015 (AFP Photo/Jewel Samad) |
New York (AFP) - A reviled US pharmaceutical boss who caused a storm in September by jacking up the price of a life-saving drug by 5,000 percent was arrested Thursday on fraud charges, prosecutors said.
The arrest
of Martin Shkreli -- who has appeared to revel in his notoriety -- was not
linked to the massive increase in the price of Daraprim, a drug used to treat
malaria and infections suffered by people with HIV.
The former
hedge fund manager, 32, is accused of stealing $11 million in what the FBI
described as a "securities fraud trifecta of lies, deceit and greed."
"As
alleged, Martin Shkreli engaged in multiple schemes to ensnare investors
through a web of lies and deceit," said Robert Capers, US Attorney for the
Eastern District of New York.
"His
plots were matched only by efforts to conceal the fraud, which led him to
operate his companies, including a publicly traded company, as a Ponzi scheme,
where he used the assets of the new entity to pay off debts from the old
entity."
It began in
2009 when Shkreli allegedly lied to eight people to get them to invest about $3
million in his hedge fund, Capers told a press conference.
When he
lost the money through "bad trades" he started a new fund to try to
cover the losses and continue to line his pockets.
Shkreli was
also charged by the Securities and Exchange Commission.
"Over
a five-year period, Shkreli is alleged to have perpetrated a series of frauds
on investors in his hedge funds and Retrophin's shareholders in order to cover
up his poor trading decisions," said Andrew Ceresney, director of the
SEC's enforcement division.
Shkreli is accused of siphoning about $120,000 from one of the hedge funds to pay for food, clothing, rent and other personal expenses.
Shkreli is accused of siphoning about $120,000 from one of the hedge funds to pay for food, clothing, rent and other personal expenses.
He is also
accused of lying to investors about one of the fund's size and performance by
claiming returns of nearly 36 percent when it had really generated a loss of 18
percent and saying the fund had $35 million in assets when it really had less
than $7,000.
He
allegedly stole $900,000 in 2013 from one of the funds to settle with a broker
who was suing him and stole more money to pay off disgruntled investors who
were threatening legal action.
Also
arrested was Evan Greebel, a lawyer who was outside counsel to Retrophin.
Reveling
in controversy
Shkreli
gained notoriety in September when his company Turing Pharmaceuticals raised
the price of Daraprim from $13.50 a tablet to $750 after acquiring the drug.
The move --
and his arrogant response to the controversy -- was angrily denounced by US
politicians.
"Price
gouging like this in the specialty drug market is outrageous," Democratic
frontrunner Hillary Clinton said on Twitter, vowing to fight runaway drug
prices.
Turing
later announced that while it would not lower the drug's per tablet price, it
would negotiate agreements with health groups on wholesale prices.
Shkreli,
the chief executive of the company, specializes in buying patents on
inexpensive drugs and then hiking their price.
In
November, he gained control of another drug company, Kalobios Pharmaceuticals,
whose stock price plummeted on news of his arrest, falling 53.24 percent to
$11.03 before trading was suspended.
Reveling in
controversy, Shkreli made waves earlier this month by buying a secret Wu-Tang
Clan album for $2 million, "Once Upon a Time in Shaolin."
Turing
Pharmaceuticals did not immediately return a request for comment.
No comments:
Post a Comment