'Pharma bro' convicted of fraud in US court

Martin Shkreli was was found guilty of two counts of securities fraud and one count of conspiracy.
Martin Shkreli was was found guilty of two counts of securities fraud and one count of conspiracy.

To the world, Martin Shkreli was a successful hedge fund manager-turned-pharmaceutical company boss, while Marcus Hutchins was the ethical hacker who found a way to neutralise the WannaCry virus that crippled computer systems worldwide. But coming into the public eye proved to be detrimental for both men, with the limelight drawing attention to murky dealings.

NEW YORK • A US jury convicted Martin Shkreli, the brash former drug company and hedge fund executive, on Friday of defrauding investors in hedge funds he ran years before he gained fame for jacking up the price of a drug.

Jurors in US District Court in Brooklyn found Shkreli guilty of two counts of securities fraud and one count of conspiracy. But they acquitted him of five conspiracy counts, including conspiracy to steal from his old drug company, Retrophin Inc.

Securities fraud carries a maximum sentence of 20 years in prison, though defendants in such cases rarely receive the maximum sentence.

Federal prosecutors had accused the 34-year-old New Yorker of lying to investors in his hedge funds, MSMB Capital and MSMB Healthcare, for concealing trading losses behind fake account statements and looting Retrophin to pay them back. They said Shkreli eventually paid investors back with stock or cash from Retrophin by having them sign settlement or consulting agreements with the company.

Shkreli portrayed the verdict, which came on the fifth day of deliberations after a month-long trial, as a victory. "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," he said.

Acting US Attorney Bridget Rohde, whose office prosecuted the case, praised the jury's decision. "Justice was served," she said.

Before going on trial, Shkreli had been best known for raising the price of anti-infection drug Daraprim by 5,000 per cent in 2015 as chief executive of Turing Pharmaceuticals. That increase sparked outrage from US lawmakers and patients - and earned Shkreli the nickname "Pharma bro".

Shkreli's attorney, Mr Benjamin Brafman, citing the acquittal on the Retrophin charge, said Shkreli might avoid prison time or at least receive a "much, much lower" sentence.

Mr Christopher LaVigne, a former federal prosecutor, said it was notable that prosecutors secured a conviction without investor losses, and said it could encourage more such cases in the future. "A case like this, I think it emboldens them," he said.

REUTERS

A version of this article appeared in the print edition of The Sunday Times on August 06, 2017, with the headline ''Pharma bro' convicted of fraud in US court'. Print Edition | Subscribe