Martin Shkreli, CEO of Turing Pharmaceuticals, the maker of HIV drug Daraprim, has been arrested by the FBI. He was unshaven, and wearing a grey hoodie during the proceedings.
He has already come under intense criticism from the general public, politicians, and the LGBT community for his raising of the price of Daraprim, the toxoplasmosis and HIV treatment drug, by 5000%, a drug which costs one dollar to produce.
However, his arrest, at his Midtown Manhattan apartment early yesterday, has nothing to do with his behaviour in relation to Daraprim, but appears to be in connection with a former hedge fund where he lied to investors, and a previous drug company he ran.
He has been arrested for securities fraud while he was a hedge fund manager, and while he ran the bio-pharmaceutical company, Retrophin, a company which had also raised the price of a drug from $1.50 to $30.
The US Attorney’s office said at a conference that he was being arrested for securities fraud, conspiracy, conspiracy fraud, and wire fraud conspiracy, along with lawyer Evan A. Greebel, who was arrested for wire fraud conspiracy.
Shkreli has been charged on all 7 counts of the indictment, with the US Attorney’s office stating that he had been arrested for:
“orchestrating three inter-related schemes, 2 involving 2 different hedge funds that he ran, founded and managed, and the third involving Retrophin, Inc., a publicly-traded company that Shkreli founded, and at one point, controlled as its Chief Executive Officer. Shkreli started out with a hedge fund in 2009, called MSMB Capital, and he took in approximately 3 million dollars, from 8 investors, based upon lies that he told them about his prior performance as a portfolio manager, the amount of assets under the fund’s management, and the oversight of the fund, by independent auditors. But when he lost the 3 million dollars that he’d gotten though a series of bad trades, he didn’t tell his investors that he’d lost their money. Instead Shkreli started a new hedge fund…..called MSMB Health Care, which he founded in 2011”.
Shkreli was released on $5million bail, taken from a bank account and secured by members of his family.