In September 2015, Martin Shkreli became infamous after his company purchased the rights to an AIDS drug (Daraprim) and increased its price from $13.50 per pill to $750 per pill. This price gouging quickly earned Shkreli the title as “the most hated man in America.” Only a few months later, however, Shkreli got a dose of his own medicine.
In December 2015, the FBI arrested Shkreli and charged him with securities fraud. According to the SEC’s complaint, Shkreli misappropriated investor funds and lied to investors in his two hedge funds, MSMB Capital Management LP and MSMB Healthcare LP (MSMB). After those investors sued Shkreli, he founded and took public a pharmaceutical company named Retrophin, Inc. From September 2013 through March 2014, Shkreli induced Retrophin to issue stock and make cash payments to the disgruntled MSMB investors. Shkreli characterized these payments as “consulting services” from Retrophin. [Read more…]