Brooklyn jury finds price-gouger Martin Shkreli guilty of defrauding investors

05 Aug 2017


A Brooklyn jury yesterday found Martin Shkreli, the former hedge fund manager notorious for massively jacking up the price of a critical drug (See: Turing vows to cut Daraprim drug price after furore over 5,000% hike), guilty of defrauding his investors.

Shkreli gained notoriety and earned public ire last year, after Turing Pharmaceuticals, the company he founded, spent $55 million for the US rights to sell a life-saving medicine called Daraprim and promptly hiked the price about 5,000 per cent from $13.50 to $750 per pill (See: Turing does volte face on cutting price of drug Daraprim).

In February, he irked US lawmakers by calling them imbeciles and exercising of his Fifth Amendment rights against self-incrimination in a hearing on the issue before the House Oversight and Government Reform Committee (See: Price-gouging drug executive Shkreli calls lawmakers 'imbeciles').

Shkreli, who was acquitted on five other charges, could face up to 20 years in prison, though, according to legal experts he was likely to be sentenced to much less.

The jury delivered its decision after five days of deliberations, but a clear victory eluded both sides. All the same, according to commentators, for Shkreli, the decision was humbling, as he had boasted that prosecutors would have to apolgise to him.

But Shkreli did meet reporters outside the courthouse and said he was ''delighted in many ways,'' pointing out that had been exonerated on charges he considered more serious.

''This was a witch hunt of epic proportions,'' he said. ''Maybe they found one or two broomsticks, but at the end of the day we were acquitted of the most important charges in this case.''

The jury of five men and seven women found Shkreli, 34, guilty of misleading investors in two of his hedge funds, MSMB Capital and MSMB Healthcare. According to prosecutors, Shkreli lied in order to get their money and then to cover up massive losses following a bad stock bet.

Though he was found guilty of three counts of securities fraud, the jury acquitted him of five other criminal counts related to hedge funds investors and a drug company he founded.

During the trial, prosecutors had claimed Shkreli had defrauded multiple investors in his two hedge funds out of millions of dollars, and had paid them back with stock and cash that he looted from a the biotech company he created, Retrophin.

The New York Times quoted a juror anonymously as saying, "In some of the counts at least we couldn't find that he intentionally stole from them and the reasoning was to hurt them."

Judge Kiyo Matsumoto did not set a date for sentencing.

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