SEC Obtains Final Judgment Against Former Pharmaceutical Company CEO Martin Shkreli
On February 23, 2022, the United States District Court for the Eastern District of New York entered a final judgment against Martin Shkreli, the former CEO of Retrophin, Inc., a publicly-traded pharmaceutical company.
The Court granted in its entirety the SEC’s motion for a permanent officer and director bar and $1.392 million in civil penalties. Shkreli previously consented to a partial judgment ordering injunctions against future violations of the securities laws.
The SEC’s complaint, filed on December 17, 2015, charged Shkreli with committing widespread fraud during a 5-year period while CEO at Retrophin and when he managed hedge funds. The complaint alleged that Shkreli misappropriated money from two hedge funds he founded and made material misrepresentations to investors among other misconduct.
Shkreli was convicted in a related criminal case on two counts of securities fraud and one count of conspiring to commit securities fraud. He was sentenced to seven years in federal prison and ordered to pay $7.4 million in fines. He is scheduled to be released in November 2022.
Martin Shkreli also gained infamy in 2015 for buying the drug Daraprim, an antiparasite that costs pennies to make, and raising its price to $750 per pill. The move drew scrutiny from the Infectious Diseases Society of America and the HIV Medicine Association, by the Pharmaceutical Research and Manufacturers of America, presidential candidates Hillary Clinton, Bernie Sanders, and Donald Trump, and many members of Congress.
In 2020, the Federal Trade Commission and seven states filed a lawsuit accusing Shkreli of blocking competition from generic drug companies by preventing them from accessing Daraprim to conduct testing in line with FDA regulations. The suit also claimed that Shkreli used exclusive supply agreements to limit the market availability of the drug’s active ingredients. That case came to an end last month with a judge ruling that Shkreli must pay $64.6 million in fines to be given to victims nationwide.
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