Price-gouging CEO indicted on securities fraud charges

Controversial businessman Martin Shkreli, known for tremendously inflating the retail prices of several medications, was arrested Thursday in NY on several charges of securities fraud for his earlier work as a fund manager.

The arrest also appears to be related to Shkreli’s now-defunct hedge fund, MSMB Capital. The former hedge fund manager is also charged with fraud after he misappropriated Retrophin funds in order to repay MSMB investors. He said the price hike by Turing that got all the attention for Shkreli was not part of the investigation.

“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 NY. “Instead, he abused that power and used the public company’s assets to pay off his own personal debts”, Capers said.

Daraprim is a 62-year-old drug mainly used to treat people who have toxoplasmosis, a potentially deadly parasitic infection.

Lefcourt said that Shkreli’s high-profile statements and actions in recent months “raises his profile to a degree that could be devastating to him if he ever has to face a judge at sentencing”.

Whether authorities plan to reclaim the album through asset forfeiture in the future was not immediately clear, but Wu-Tang has already distanced themselves from Shkreli. Then Mr. Shkreli took the CEO position, and announced that the reason he involved in the firm is a drug called Lenzilumab which had “particular promise” in treating a type of leukemia that has no FDA-approved treatment options.

Earlier this year, Shkreli became headline fodder with the drug price hike at Turing.

Federal prosecutors are expected to hold a press conference later today, Thursday, when they will detail the specific charges against Shkreli.

Democratic presidential front-runner Hillary Clinton has previous ripped into Shkreli.

In an August civil lawsuit in Manhattan federal court, Retrophin sued its founder, Shkreli, seeking $65 million in damages and disgorgement of Shkreli’s compensation from the company.

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”. He said he paid $2 million. In fact, he recently said he probably should have raised it more. The SEC also charged Retrophin’s former outside counsel and corporate secretary Evan Greebel with aiding and abetting certain aspects of Shkreli’s alleged fraud.

KaloBios shares plummeted 53% to $11.03 in premarket trading.