Turing Pharmaceuticals close to replacing CEO Martin Shkreli

TRENTON, N.J. (AP) Martin Shkreli, the pharmaceutical executive arrested Thursday on charges of securities fraud related to a company he previously ran, has resigned as the head of one of the companies he now runs, Turing Pharmaceuticals. “The legal matters concerning the founder and CEO Martin Shkreli are personal and have no bearing on Turing Pharmaceuticals”, the company said on its website on Thursday.

In a press conference, Brooklyn U.S. Attorney Robert Capers said, “Shkreli essentially ran his company like a Ponzi scheme where he used each subsequent company to pay off defrauded investors from the prior company”.

As we reported Thursday, Shkreli and Evan Greebel, an associate, who was also arrested Thursday, were charged with two counts of securities fraud, three counts of conspiracy to commit securities fraud, and two counts of conspiracy to commit wire fraud. Federal prosecutors accuse Shkreli of using Retrophin to repay investors who lost money in his now-defunct hedge fund, MSMB Capital Management.

Ceresney, director of the SEC’s Division of Enforcement, said Shkreli allegedly “perpetrated a series of frauds on investors in his hedge funds and Retrophin’s shareholders in order to cover up his poor trading decisions”. He posted $5 million bond later that afternoon, leaving the courtroom pale as a ghost with a trail of reporters clambering for comment.

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.

“The drug was unprofitable at the former price, so any company selling it would be losing money”, Shkreli said in his defense, to CBS News.

Shkreli was in the headlines yesterday as well after he revealed in an unsettling interview with HipHopDX, his plans for trying to bail out Bobby Shmurda, referring to him as “New York’s best chance for rap since 50 Cent”. He did so this fall, shortly after Turing acquired rights to sell the pill in the US, paying another company $55 million for it.

The accusations do not relate to Turing Pharmaceuticals, the company that raised the price of Daraprim. “Thanks for the support”.

Shkreli’s takeover of the firm sent shares soaring 400% on the first day after the news, and shares had since more than doubled in value.