“Pharma bro” Martin Shkreli has been found guilty of three counts of securities fraud. A federal jury acquitted him of five other criminal counts. Shkreli first came to the public’s attention in 2015 when he raised the price of a lifesaving drug by more than 5,000 percent. While CEO of Turing Pharmaceuticals, Shkreli decided to raise the price of the drug Daraprim from $13.50 per pill to $750 per pill.
The price increase came as he was being investigated for the case that led to his trial. The government brought a criminal case against him for his actions related to hedge funds investors and a drug company he founded. The trial, held in U.S. District Court for the Eastern District of New York, lasted for more than a month.
Prosecutors claimed Shkreli had defrauded multiple investors in his two hedge funds out of millions of dollars. Prosecutors said that Shkreli duped multiple investors into putting millions of dollars into MSMB Capital and MSMB Healthcare. Shkreli quickly lost much of their money and used some of it to capitalize his company Retrophin.
Shkreli brushed off investors who asked for their money back in cash, often for months. During that time, he continued sending out financial statements to investors claiming positive returns. He then decided to improperly use Retrophin stock and cash to pay off the funds’ investors, according to the prosecutors.
The seven-woman, five-man jury rejected parts of the prosecution’s evidence. A juror quoted anonymously by the New York Times, said “In some of the counts at least we couldn’t find that he intentionally stole from them and the reasoning was to hurt them.” The split verdict came on the fifth day of jury deliberations.
Judge Kiyo Matsumoto did not set a sentencing date. Shkreli faces a maximum sentence of 20 years in prison. He remains free on $5 million bail. Shkreli has no prior criminal history. Outside of the courthouse, Shkreli said, “This was a witch hunt of epic proportions and maybe they found one or two broomsticks but at the end of the day we’ve been acquitted of the most important charges in this case.”
Prosecutors and defense lawyers still must argue how much, if any, money Shkreli should be ordered to forfeit. The jury found that any loss suffered by Retrophin was low, so the amount of money Shkreli could be made to surrender will be low and the sentence recommended will be light.
Acting United States Attorney Bridget Rohde said, “We’re gratified as we stand here today at the jury’s verdict.” Rohde’s prosecution team next plans to try Shkreli’s co-defendant and former business lawyer Evan Greebel this fall.