Sunday 18 March 2018

Martin Shkreli convicted on three counts in hedge fund fraud trial

Martin Shkreli arrives at federal court in New York on Friday (AP)
Martin Shkreli arrives at federal court in New York on Friday (AP)

Martin Shkreli, the eccentric former pharmaceutical chief executive notorious for a price-hiking scandal and for his snide Pharma Bro persona on social media, was convicted on Friday on US federal charges he deceived investors in a pair of failed hedge funds.

A Brooklyn jury deliberated five days before finding Shkreli guilty on three of eight counts.

He had been charged with securities fraud, conspiracy to commit securities fraud and conspiracy to commit wire fraud.

Prosecutors had accused Shkreli of repeatedly misleading investors about what he was doing with their money.

Mostly, he was blowing it with horrible stock picks, forcing him to cook up a scheme to recover millions in losses, they said.

Shkreli, 34, told "lies upon lies", including claiming he had 40 million US dollars in one of his funds at a time when it only had about 300 dollars in the bank, assistant US attorney Alixandra Smith said in closing arguments.

The trial "has exposed Martin Shkreli for who he really is, a con man who stole millions", added another prosecutor, Jacquelyn Kasulis.

But the case was tricky for the US government because investors, some wealthy financiers from Texas, gave evidence at the trial and conceded that Shkreli's scheme actually succeeded in making them richer, in some cases doubling or even tripling their money on his company's stock when it went public.

The defence portrayed them as spoiled "rich people" who were the ones doing the manipulating.

"Who lost anything? Nobody," defence lawyer Ben Brafman said in his closing argument.

Some investors had to admit in the witness box that partnering with Shkreli was "the greatest investment I've ever made", he added.

For the boyish-looking Shkreli, one of the biggest problems was not part of the case, his purchase in 2014 of rights to a life-saving drug that he promptly raised the price from 13.50 dollars to 750 dollars per pill.

Several potential jurors were kept off the panel after expressing disdain for the defendant, with one calling him a "snake" and another "the face of corporate greed".

The defendant also came into the trial with a reputation for trolling his critics on social media to a degree that got him kicked off Twitter and for live-streaming himself giving math lessons or doing nothing more than petting his cat, named Trashy.

Among his other antics: boasting about buying a one-of-a-kind Wu-Tang Clan album for two million US dollars.


Press Association

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