Martin Shkreli during a Congressional hearing in 2016.
CREDIT: Getty Images
You may remember Martin Shkreli as the pharmaceutical CEO who acquired the drug Daraprim and immediately raised the price of a single dose from $13.50 to $750. Many AIDS patients need Daraprim to fight the disease toxoplasmosis, and both Shkreli and Turing Pharmaceuticals, which he led at the time, were widely reviled over that move.
But his arrest back in December had absolutely nothing to do with that event. Before Daraprim and Turing, Shkreli was a hedge fund manager and also started a pharmaceutical firm called Retrophin that went public. Things didn’t go well. One of his hedge funds lost virtually all its money on a single bad investment, but Shkreli sent out fake statements to investors showing that the fund still had plenty of money.
Then he engineered a complicated stock deal in which he bought Retrophin shares at below market value and then used them to pay back the investors in his hedge funds. Retrophin itself was then out of cash and the whole house of cards was about to come tumbling down, but at the last moment, Shkreli secured a $10 million loan from an unnamed investor. That saved the company.
The whole debacle had something of a happy ending for investors. The hedge fund investors got their money back with interest. And Retrophin went on to become a successful company whose stock is now worth around $20, compared to the $3 or so it was trading for at the time of all this fraud.
But it was still deeply illegal. Retrophin’s board fired Shkreli as CEO and has since sued him for $65 million. And federal prosecutors in Brooklyn charged him with eight counts of fraud. Today, a jury found him guilty of three of those counts. Two of them could result in sentences of up to 20 years each, and the third could result in a sentence of up to 5 years.
‘I’m so innocent they’re gonna give me an apology.’
Throughout his leadership of Rertrophin and the hedge funds (not to mention as CEO of Turing), Shkreli was not only guilty of fraud, but the most extreme arrogance. Warned by his lawyers not to do a deal that would give him Retrophin shares at below market value, he “crudely dismissed” the advice, according to The New York Times. He was derisively called “Pharma Bro” on social media–so he adopted that as his handle on League of Legends. He changed his profile name on Twitter to Martin the God.
That arrogance was in full view as well during the trial. For instance, he read a book while the prosecution was making its final rebuttal argument in the case. At one point, he dropped in on a group of reporters in the courthouse to tell them that the prosecution was “junior varsity”–prompting the judge to order him not to speak in or around the courthouse again. He spoke afterward though, livestreaming from home throughout much of the five-week trial and saying things like this: “I’m so innocent, the jury, judge and the prosecution are gonna give me an apology.”
Well, they didn’t. Given that few people or institutions were badly harmed by his fraud, would they have cut him some slack if he had behaved, well, a bit more like a human being? It’s hard to know for sure. But you have to think it might have helped.
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.