Price-Gouging Wu-Tang Fan Martin Shkreli Arrested for Security Fraud

The arrest also appears to be related to Shkreli’s now-defunct hedge fund, MSMB Capital.

Also arrested was lawyer Evan Greenbel, who was accused of conspiring with the pharmaceutical entrepreneur. He is accused of losing millions of dollars in investments and covering it up “with scheme after scheme”, according to Bloomberg.

The Securities and Exchange Commission (SEC) also charged Shkreli with a parallel civil complaint Thursday, alleging he misappropriated funds from two hedge funds he ran from 2009 to 2014.

The brash and widely-despised pharmaceutical CEO Martin Shkreli orchestrated a “web of lies and deceit”, U.S. Attorney Robert Capers said in a press conference after Shkreli’s arrest today. The case has nothing to do with the drug price but with plundering a company he founded to pay off personal debts, officials said.

But Shkreli recently took over another small publicly-traded drug company, KaloBios, which develops cancer drugs. It acquired old, neglected drugs often used for rare diseases and substantially raised their prices. In September, he drew condemnation for raising the price of a drug for HIV patients by more than 5,000 percent. The maximum sentence for the top count is 20 years in prison.

The drug price hike instituted by Shkreli at Turing brought widespread criticism in the media, which dubbed him “the most hated man in America”, as well as by politicians.

The SEC’s allegations against Shkreli tell a tale of greed, grandiose boasting and theft.

His attorneys had no immediate comment. Donald Trump called Shkreli “a spoiled brat”.

On October 16, 2013, when Shkreli initially questioned this new approach, Greebel explained, “We can call it a settlement agreement, but given [the auditor’s] recent behavior they may require it to be disclosed in the financials”.

Earlier this month, the “pharma bro” said he wished he raised the price even more.

The Campaign for Accountability, a nonprofit watchdog group that urged Congress to investigate Shkreli’s price increases, called his arrest “long overdue” and added: “He has avoided accountability despite a pattern of fraudulent behavior”.

Sanders, who advocates a single payer healthcare system to control drug prices, has refused to accept a donation from Shkreli, instead giving the money to a health clinic in Washington, D.C.

Wu-Tang Clan’s $2 million album is still in Martin Shkreli’s clutches. But Retrophin’s board of directors ousted him in September 2014, a move that triggered a 4.5% one-day drop in the company’s shares.