Controversial pharmaceutical CEO Martin Shkreli has been arrested on charges of fraud.
While this is great news for fans of social justice (Shkreli having earned the scorn of many by raising the price of a drug used to treat infections in sufferers of HIV by an unconscionable 5,500%), Wu Tang Clan fans hoping that the bust might have also seized back the group’s one-of-a-kind album Once Upon A Time In Shaolin (which was recently purchased by Shkreli) have had hopes dashed by a Tweet from the New York office of the FBI.
“No seizure warrant at the arrest of Martin Shkreli today, which means we didn’t seize the Wu-Tang Clan album,” the Tweet read, adding an even more bizarre element to an already strange case. Shkreli’s reportedly $2 million purchase of the album, drew hatred from fans after the CEO told Bloomberg he had no plans to listen to the album anytime soon.
The arrest comes after Shkreli was targeted in an embezzlement probe at his former company Retrophin.
#Breaking no seizure warrant at the arrest of Martin Shkreli today, which means we didn’t seize the Wu-Tang Clan album.
— FBI New York (@NewYorkFBI) December 17, 2015
A Bit Of Background:
Alleging that the Pharma-douche had misappropriated up to $US11 million ($15.5 million) in a twisted web of various schemes and plots both at Retrophin and during his time as a hedge fund manager, Robert Capers – US Attorney for the Eastern District of New York – commented that: “his plots were matched only by efforts to conceal the fraud.”
Expanding on Shkreli’s widespread misconduct, Capers said that it was his efforts to conceal the fraud that “led him to operate his companies, including a publicly traded company, as a Ponzi scheme, where he used the assets of the new entity to pay off debts from the old entity.”
And it wasn’t just the US Attorney’s Office that was going after Shkreli, with the FBI describing his behaviour as a “securities fraud trifecta of lies, deceit, and greed”.
Also charged by the Securities and Exchange Commission (SEC), the consensus again is that Shkreli orchestrated the complex series of frauds “in order to cover up his poor trading decisions,” according to Andrew Ceresney, director of the SEC’s enforcement division.
Born to Albanian and Croatian immigrant parents who worked as janitors to support their child, Shkreli’s life story reads like some ironically cruel twist on the American dream. Rising from humble beginnings, Shkreli came to embody the worst aspects of corporate greed, not only profiteering from the illness and suffering of others but straight up stealing money from investors. There is no honour amongst thieves, it seems.
A promising student, he dropped out of a prestigious Manhattan high school to pursue his “conquest” of Wall St before the age of 20. Going straight into an internship under Mad Money host Jim Cramer’s investment firm in 2000, he was off starting his own hedge fund (Elea Capital) capital management firm (MSMB Capital Management), and finally Retrophin (2011).
He gained a reputation early on for ruthless business practices, making big money trash talking biotech firms on online forums and chat rooms and then shorting the stocks on the market. However his early successes didn’t hold up, with Shkreli losing investors’ money only to lie and cover it up, paying previous debts with money from new investors. This was all while he was claiming a 35.8% return rate on investments while he was actually losing 18%, lying to investors and reporting that the fund had $US35 million in assets when, in reality, it had less than $US7,000.
It doesn’t stop there though, with Shkreli also accused of siphoning off around $US120,000 from one of the hedge funds to pay for personal expenses like food, clothing, rent and more. He then allegedly stole a further $US900,000 in 2013 from another of the hedge funds to settle a lawsuit with one of his brokers, while stealing more cash to pay off angry investors who were threatening to sue.
He then gained control of yet another company in November of this year (seriously, how were people still doing business with this guy?), this time drug company, Kalobios Pharmaceuticals. Following his arrest, the company’s stock price has plummeted 53.24 per cent to $US11.03 before trading was suspended.
— Joko Anwar (@jokoanwar) September 24, 2015
Shkreli has now resigned as CEO of Turing Pharmaceuticals, the company where he gained notoriety by jacking up the price of HIV medication. And despite the seemingly overwhelming amount of evidence against him, he also pleaded not guilty to fraud charges, and was released after posting a $5 million bond.
Mind you, authorities would want to keep an eye on him – and his finances – because with his history of high finance fraud and deceit, a bond for $5 million may not not be a huge deterrent to him making a run for the border. Then again, considering he’s one of the most widely hated men in America right now, a brief stay at Club Fed (aka Minimum Security Prison) might look appealing to him.
Martin Shkreli looks like the sort of person who says things along the lines of 'This displeases me, mother'. pic.twitter.com/DCrfwwwlzy
— Glenn Moore (@TheNewsAtGlenn) September 23, 2015
— Michael Beatrice (@MichaelBeatrice) September 22, 2015