For months, Martin Shkreli, a former hedge fund manager who took over a pharmaceutical company and raised the cost of a critical drug more than fiftyfold, has been the face of corporate greed and immoral business practices. He may soon has a record to go along with his well-earned reputation. Shkreli was arrested on a seven-count indictment alleging that he fraudulently induced investors to invest in two separate funds and misappropriated Retrophin’s assets to satisfy Shkreli’s personal and professional debts. Presumably, if convicted, the judge will not (despite natural temptations) enhance his sentence 50 times simply because he want a higher profits penalty curve.
Notably, the charges have nothing to do with the disgusting price gouging that Shkreli, 32, demonstrated at his current company, Turing Pharmaceuticals. Shkreli spent $55 million in August for the U.S. rights to sell Daraprim, a 62-year-old drug for a rare parasitic infection, and then raised the price from $13.50 to $750 per pill. The drug is the only approved treatment for toxoplasmosis, a disease that mainly strikes pregnant women, cancer patients and AIDS patients.
After international outcry, Shkreli said the company would cut the price of Daraprim, but then reneged on the promise and said that the company would instead reduce what it charges hospitals for Daraprim by as much as 50 percent. However, the company would still charge insurance companies the full exorbitant price.
Shkreli was quoted as saying that he wished he had raised the price more and that “No one wants to say it, no one’s proud of it, but this is a capitalist society, a capitalist system and capitalist rules. And my investors expect me to maximize profits, not to minimize them or go half or go 70 percent but to go to 100 percent of the profit curve.”
None of the gouging over Daraprim was deemed illegal. Instead the criminal charges instead involve his actions at Retrophin, a company that he ran as CEO from 2012 to 2014. Shkreli is being sued for more than $65 million, by Retrophin accusing him of using his control of the company to enrich himself and to pay off the claims of financial fund investors he had defrauded.
The investigation did not apparently deter Shkreli from spending wildly as the self-described “most eligible bachelor. He recently purchased the only copy of a Wu-Tang Clan album titled “Once Upon a Time in Shaolin,” for $2 million.
Source: New York Times
Ralph Adamo at December 18, 2015 at 11:56 pm
The SEC and the FBI love to make examples that they are doing their jobs by focusing on such small time corporate “criminals” as Martin Shkreli.
That occurs to me at times as well. In Shkreli’s case, he made his own bed, then went all chest thumping ego crazy, and now will pay for it. If one has egregious errors in their past, it’s bright to NOT draw attention to yourself down the road. I have no sympathy for him…at least the SEC/FBI “caught” somebody.
The SEC and the FBI love to make examples that they are doing their jobs by focusing on such small time corporate “criminals” as Martin Shkreli. The last big “catch” like this was Fabrice “Fabulous Fab” Tourre, a small time Goldman Sach employee. This is done to make fools think that the system is working and that the SEC and the FBI are doing their jobs and going after the “bad guys.” But it’s an obvious illusion to any thinking person. The REAL criminals — from JP Morgan Chase, Barclays, Goldman Sachs, Citibank, etc. — always get away scot-free. This is so because THEY control the politicians and those so-called “regulatory” and “enforcement” agencies. Sorry to break this reality to those who need so desperately to cling to the false notion that there is actual justice in this world. This reminds me of the time, many years ago, that the IRS made an “example” out of Leona Helmsley. Although she had lots of money, she was still an outsider to the corrupt corporate oligarchical syndicate. Someone like Warren Buffett — who owes back taxes of more than $1 billion plus penalties and interest — IS part of the system, so he’s untouchable. But poor Leona did something that the corporate crime syndicate considered unforgiveable. She told the truth when she famously said “Only the little people pay taxes.” And for giving away one of the closely guarded secrets of the crime syndicate, she had to pay the price.
” The REAL criminals — from JP Morgan Chase, Barclays, Goldman Sachs, Citibank, etc. — always get away scot-free. ”
Well, no not always. Crony law enforcement, in a historical sense, is a relatively recent phenomenon.
I did not realize it before, but in the S&L scandal of the 1980’s more than 1,000 executives were prosecuted.
“The savings and loan debacle was one-seventieth the size of the current crisis, both in terms of losses and the amount of fraud. In that crisis, the savings and loan regulators made over 30,000 criminal referrals, and this produced over 1,000 felony convictions in cases designated as “major” by the Department of Justice. ”
If the DOJ of the 1980s were on duty, can you imagine how many prosecutions and convictions we would have today?
But you are right, WS is wired to the politicians. They are too smart to pass around fat envelops of money. But there are lifetime rewards for exercising the right professional judgment. But that is all ancient history. The statute of limitations is safely past. It is good to have friends in high places. Everybody knows that.
I just love capitalism and all the other -ism’s too.
This crazy pricing of medicines happens all the time. This was just one example that got publicity and in the end consumers are paying for it. And the price of Daraprim and too may are are still high!
If found guilty, I hope he gets the maximum.
John Smith, I’ve eaten @ Frontera Grill. The food was good, but not great. The drinks were superb.
UCK was a bunch of Muslim terrorists that attacked the Russian allied Christian Orthodox Serbs. NATO backed the terrorists. Remember, back when Clinton was president? Sound familiar people?
Hell yes the Mexicans are running every kitchen in Chicago now including all the other ethnic ones!
That’s why Rick Bayless a gringo saw an opening in Mexican restaurants and opened frontera grill.
Richard Faust, I have FBI friends who have spoken of the Albanian Mafia. With the destruction of the Italian-American Mafia, many ethnic mafioso have filled the vacuum. The Albanians are particularly violent. So as not to stigmatize, here in Madison we have Albanian immigrants who own pizza joints. Prior to their arrival, a decade or more ago, this was fast food and crappy local Cheesehead pizza. The Albanians make pizza like Italians. Most of the yokels here think these guys are Italian, indeed many can speak some Italian. So, they do nothing to dissuade people of that notion. I know they’re Albanian and bust their balls over their pretending to be Italian. They laugh and enjoy the banter. Now, these guys mostly have Mexicans making their pizza. But, they taught them well. Anthony Bourdain often praises Mexicans. He says, and I have seen, they are extremely teachable and make great cooks.
He has a face that simply demands to be pummeled. Demands will be met, I hope. First day, “Hello Bernie.” “Hello Mary.” “That’s Marty, not Mary.” “No in here, you’re Mary; now get your lily whites over here.”
As I understand, a drug company reverse engineered daraprim and came up with a generic version 2 weeks after he raised the price. Free market can work for good when not tied up by laws and regulation.
While in prison, it might be advisable for him to tone down his “Most Eligible Bachelor” claim.
Thank you mame.
Parents are Albanian and Croatian immigrants to the US.
What is the dork’s ethnic background? The name sounds Gypsie.
Albanian Mafia. Look it up. Over and out.
If he stole 50 bucks at 7-11 he would get (maybe) 18 months. How many times does $50 go into $65 million any way?
His actions raise an interesting topic for the free market boys. Pricing based on demand may make perfect sense for some goods – tickets to a concert for example. But what about goods necessary for life – food, water, air, medical procedures, or drugs?
Does it really make sense to let someone monopolize supply and then charge what ever they can extract when lives hang in the balance?
I nominate him for the award of biggest arsehole of 2015.
I think that award should be shared with Donald Trump.
Where did JT come up with those weird and bizarre photos of this guy? Those pictures happen to be the oddest part of this story–not the part that some snot-nosed, greedy and (most probably) coked-up hedge fund manager is making some unethical and illegal business moves. I saw an interview with him months ago; he made my skin crawl.
What a surprise…a snake in the grass. Hope they take him to the cleaners, literally and financially.