Martin Shkreli resigns from Turing Pharmaceuticals after fraud charges

Shkreli, a flagrant self-promoter who recently said he should have hiked the price of anti-parasitic drug Daraprim even more, was paraded in handcuffs by the Federal Bureau of Investigation after his arrest.

Pharmaceutical CEO Martin Shkreli, widely pilloried for jacking up the price of a drug used to treat AIDS patients, has been indicted on criminal charges that he bilked a company out of millions of dollars. He was released on $5 million bail. Authorities said Shkreli misappropriated funds, lied about investment returns and conspired to defraud Retrophin by issuing company stock to settle personal disputes.

He thanked Mr Shkreli for helping to make Turing the “dynamic, research-focused company it is today and wish him the best in his future endeavours”. The alleged scheme involved help from the company’s lawyer, Evan L Greebel, who was also arrested and charged on Thursday with one count of wire fraud conspiracy.

“This company needs to be cleaned up” like Shkreli’s previous drug company, Retrophin (RTRX – Get Report) , the investor said.

The 32-year-old was arrested on Thursday morning in New York City. Last month, Turing said it would offer price discounts of up to 50 per cent to hospitals.

Shkreli became known as the “bad boy” of pharmaceuticals for defiantly raising the price of the life-saving drug Daraprim from $13.50 to $750.

Turing’s chairman Ron Tilles will step up as interim chief executive.

“Those price increases combined with Mr. Shkreli’s jeering response to his critics has made him a lightning rod for public outrage and fodder for the presidential campaign”, The New York Times reported.

“Among the accusations leveled by the Securities Exchange Commission: that when Shkreli stated in 2010 that his hedge fund was managing $35 million in assets, the fund actually had less than a combined $1,000 in its bank and brokerage accounts”.

Essentially, Shkreli used each new company’s profits to pay off other, unhappy, investors from his hedge fund.

Trading in KaloBios shares was halted early Thursday, after Shkreli’s arrest, and hasn’t resumed.