Economy

Shkreli Convicted On 3 Counts In Securities Fraud Trial

Madeline Patrick
Aug 05, 2017     
Shkreli Convicted On 3 Counts In Securities Fraud Trial

A Brooklyn jury deliberated five days before finding Shkreli guilty on Friday on three of eight counts.

While Shkreli did not testify at his own trial, he was outspoken on social media and in front of reporters outside the courthouse, which led the judge to personally rebuke him and prosecutors to demand a gag order.

If convicted of the most serious counts, he could face up to 20 years in prison but likely would receive far less time under sentencing guidelines.

"Prosecutors say Shkreli misled investors about the size and performance of MSMB Capital Management, claiming that its returns were '+35.77% since inception' - when the fund had actually lost 18 percent".

Shkreli then started a firm, Retrophin, which he used to pay back his MSMB investors.

More news: Athletics: After De Grasse exit, who can stop Bolt and Van Niekerk?

Shkreli came to national attention after he purchased rights to a life-saving drug, Daraprim, in 2014, where he promptly raised the price from $13.50 to $750 per pill, leading him to be referred to as "the most hated man in America" and "pharma bro".

The federal trial "exposed Martin Shkreli for who he is really is - a con man who stole millions", said another prosecutor, Jacquelyn Kasulis.

"There's another Martin Shkreli in this case". But he said his hedge fund investors knew what they were getting. The defense asked why Shkreli, if he wanted to commit fraud, didn't commit fraud: He ultimately paid back his investors with shares of Retrophin, which became valuable, along with cash. Some investors had to admit on the witness stand that partnering with Shkreli was "the greatest investment I've ever made", he added. In one recent post, he wrote, "My case is a silly witch hunt perpetrated by self-serving prosecutors". He had done that, his lawyer Benjamin Brafman said, in part to get MSMB investors what they were due. Among his other antics: boasting about buying a one-of-a-kind Wu-Tang Clan album for $2 million.

The judge ordered Shkreli to keep his mouth shut in and around the courtroom after another rant to new reporters covering the trial.

Of the eight counts, Shkreli was found guilty of three. The verdict was a high-profile win for federal prosecutors in the Eastern District of NY, who had pursued the case for more than four years and have been trying to build up their business unit to compete with their colleagues in Manhattan.