Reviled drug CEO Shkreli reportedly arrested for securities fraud

Shkreli recently made fresh headlines by purchasing an art piece/rap album from Wu-Tang Clan for $2 million, of which there is only one copy. In September, he drew condemnation for raising the price of a drug for HIV patients by more than 5,000 percent.

The accusations do not relate to Turing Pharmaceuticals, the company that raised the price of Daraprim. His comments came after Shkreli was arrested on securities fraud and other charges.

At a news conference held by federal prosecutors and officials with the Securities and Exchange Commission on Thursday, officials painted Shkreli’s business dealings as “a securities fraud trifecta of lies, deceit and greed”. The FBI also confirmed they have arrested Evan Greebel, a New York City lawyer who served as outside counsel to Retrophin, and who is thought to have conspired with Shkreli regarding the financial manipulations.

If convicted, he could serve up to 20 years in prison.

Shkreli has been the focus of widespread criticism in the media, which dubbed him “the most hated man in America”, as well as by politicians.

The drug is the only approved treatment for toxoplasmosis, a disease that mainly strikes pregnant women, cancer patients and AIDS patients.

The move led presidential candidate Hilary Clinton to vow to tackle the problem of price gouging by pharmaceutical companies. A call to Shkreli’s office line went unanswered. An indie punk label Shkreli had backed, Collect Records, cut ties with him this fall.

“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. It’s the fairly boring stuff of white-collar crime, and not entirely surprising coming from someone who’s become a public villain of sorts in the last few months. Although the company promised to reduce the price, in November, it mentioned that it won’t but would instead offer concessions like volume discounts. Most patients’ copayments will be capped at $10 or less a month.

But he has also unapologetically emphasised a business-is-business argument for the price jump.

Asked if Shkreli raised drug prices to pay back investors, Capers said that was not part of the investigation.

“No one wants to say it, no one’s proud of it, but this is a capitalist society, capitalist system and capitalist rules, and my investors expect to me to maximize profits”.

Maybe he can sell that Wu Tang album for bail. If he cannot afford to pay it himself, the government can seize all of his assets, including the album.