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Martin Shkreli, "America's Most Hated", "Price Gouging" Biotech Mogul Arrested For Securities Fraud, Released On $5 MM Bond
Update: Shkreli was released on a $5 million bond after a hearing Thursday, and had his travel restricted to parts of New York. It was not immediately clear how he pleaded to the charges. Evan Greebel, whom the SEC said was Shkreli's lawyer, also faces a count of wire fraud conspiracy. He was arrested Thursday and released on a $1 million bail.
It is unclear if somehow Shkreli got 2.5x leverage on repackaged Collateralized Wu Tang Obligations.
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The “most hated man in America” just got arrested for securities fraud.
- SHKRELI, CEO REVILED FOR DRUG PRICE GOUGING, ARRESTED FOR FRAUD
- N.Y. LAWYER EVAN GREEBEL ARRESTED IN SHKRELI INVESTIGATION
MOMENTS AGO: Martin Shkreli leaving FBI after being processed by officials in New York following his arrest.
https://t.co/qGNZOusfgV
— CNBC Now (@CNBCnow) December 17, 2015
Shkreli, the baby faced, former Jim Cramer protege and serial biotech mogul who famously raised the price of a toxoplasmosis drug by 5000% in September, igniting a media and political firestorm in the process, is accused of using Retrophin (a company he founded and ran until he was ousted by the board) as a kind of slush fund. As an aside, you’re reminded that Retrophin once raised the price of a drug used to treat a rare condition that causes reoccurring kidney stones from $1.50 a pill to $30.
Retrophin claims that after Shkreli’s hedge fund, MSMB Capital, went bust after a $7 million loss on a “disastrous” trade with Merrill Lynch four years ago, he used a series of complex transactions involving Retrophin to pay back MSMB’s investors.
“Retrophin sued Shkreli in August for misuse of company funds,” Bloomberg recounts. The company “claims he engineered numerous transactions between investors in MSMB and the biotechnology firm.”
Retrophin goes on to allege that “Shkreli paid some [MSMB] investors through fake consulting agreements and others through unauthorized appropriations of stock and cash”
At one point, Shkreli allegedly decided to reclassify a $900,000 investment MSMB made in Retrophin as a loan. So basically, he invested in himself and then decided later that he had actually loaned himself money and needed to pay himself back. Retrophin did indeed pay back the “borrowings” and Shkreli subsequently used the funds to “settle another unrelated legal dispute.”
As Bloomberg goes on to note, “The Securities and Exchange Commission, which according to court documents opened an investigation into Shkreli in 2012, is expected to file a parallel civil complaint against him, according to people familiar with the matter.”
While Shkreli is known for laughing in the face of criticism and ridicule, this one might be hard to shrug off. It’s at least possible he could end up banned from running a public company, meaning Turing and KaloBios would need to find new executives (maybe Joe Campbell's KBIO short will pay off after all).
“Some of these companies seem to act more like hedge funds than traditional pharmaceutical companies,” said Senator Susan Collins, a Maine Republican who ran the recent hearing into the soaring cost of specialty drugs.
On the bright side for Shkreli, he'll have plenty of time to listen to the one-of-a-kind Wu-Tang album he bought in May for $2 million if he ends up incarcerated.
Incidentally, we predicted this might happen way back in September when we said that while "we doubt the SEC will investigate his shorting activity of biotech indices - we are confident the young 'hedge funder' will have bigger headaches to deal with soon enough."
And as for the ultimate punchline - drumroll - Shrekli had planned a meeting just two days ago with lawyers for incarcerated rapper "Bobby Shmurda" who Shrekli planned to bail out of jail. We'll close with the following quote from Shkreli, who spoke to Vanity Fair:
“We’re actually in discussion to try to bail out Bobby Shmurda. Forget whether you think he’s guilty or not, the guy should not be sitting in jail right now. He deserves a fair trial. He deserves good lawyers. He doesn’t have good lawyers. His label is hanging him out to dry and so I have a conference call tomorrow morning with them (December 15). I’ll show up with $2 million bail money no fucking problem.”
Better save that $2 million in bail money Martin. You may need it for yourself.
Meanwhile, Jim Cramer is getting nervous:
I hired summer interns from NYC School system program. They sent me this kid Shkreli for a summer. It was part of a program to help kids
— Jim Cramer (@jimcramer) December 17, 2015
I did not work at Cramer Berkowitz when they hired Shkreli as an analyst. I had left the firm; It kept my name. Didn't know him. Period
— Jim Cramer (@jimcramer) December 17, 2015
.@ReformedBroker It's insane. I hired poor high school kids as interns from the NYC program. Trashed for it here! https://t.co/S7te8snLmF
— Jim Cramer (@jimcramer) December 17, 2015
Full indictment:
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Same with me and the IRS. I was found wanting too.... $149,000. I would sure love to tell you guys my story here, you'd find it interesting...but if I did the cops would surely be at my door.
I happen to agree he may well walk. Someone mad enough with a set of rusty emasculators may yet get him. We can at least dream, can't we?
I will also agree Tax Freedom starts in the grave, but you'll still be remembered by some political party when your ghost returns and magically casts a ballot, yet dead people can't talk? There's little if any bloody justice left.
Like I said before, he's a fucking genius. Why aren't they arresting the Fed and bankers?
To all of the enlightened liberal progressive visionaries ... welcome to the warm & wonderful world of caring & sharing socialized medicine! This is not even the tip of that deadly gargantuan iceberg!
This guy's been begging for a wood shampoo . . .
The fresh & friendly faced spawn of the NIRP, ZIRP, No-Taper, TARP etc etc stimulus-centric central banking elite!
Best thing that ever happened to this little spoiled yid.
Hopefully the daily beatings teach him some humility.
Frivolous illegality issue if at all! Insane & pathetic meglomaniacal securities regulators in action!
He jacked up some drug prices. His crime has nothing to do with securities fraud. He messed with ObamaCare's cost structure.
In other words, it's a crime against the State.
That poor slob has been hauled in for what looks to be minor or frivilous securities issues by the infamous S.E.C. and their regulator henchmen! If our fearless leaders ever decieded to jail those corporate types who price gouge & cost over-run there wouldn't be enough jails in the country to house them!
Free Jon Corzine
It looks like we are being trolled.
He gets hold of an AIDS drug and raises the price to the moon.
Gays are the most dangerous politically active group in the nation.
Look at blacklivesmatter, the leader is gay and all the women are lesbian.
Then comes back later and says he can get even more money since the demand is so high and says he will raise it again.
Buys this stupid rap video he never listens to for 2 million.
Gives money to Bernie Sanders who then gives it to an AIDS clinic for publicity.
Kid trolls him on Twitter.
Big Daddy government Obama swoops down to go after him, indicted.
Does not cover his face or put head down when arrested.
Too cartoonish for me, looks like another Obama false flag for socialism.
And single payer which Obama said he wants, the gov tells YOU how much they will pay for meds.
'ObamaCare's Cost Structure' is an oxymoron ... with the emphasis on the moron part!
Whoopee dooooo! So Shkreli gets 5M bail. If they wanted him in jail it'd be 100 Million. He probably already copped a plea to release names and dates of the people he "helped". This is only the tip of the iceberg. You can bet there are some people associated with his doings that are packing their bags right now!
Best of luck!
The Old Man
Yeah. No asset forfeiture, no Bubba and lawyered to his tonsils, for sure.
Whatever happened to Godly inspired Goldman Sachs who KNOWINGLY sold toxic Paulson securitized mortgage paper to Merrill Lynch & then shorted Merrill's stock for good measure in the Great 2007 US$9T Credit Debacle? Are they still in jail?
They should sell pay for view of this guy meeting Bubba in his cell for the first time. a little alabama blacksnake
Couldn't have happened to a nicer assshole. Too bad we don't see some of this same stuff with the REAL assholes, i.e. Dimon, Blankfien, etc.
This guy is an asshole patsy. He doesn't have the connections that Dimon, Blankenfien, et al, have. Big mouth, arrogance and inexperience in the upper echelons of finance! It'll get you every time. He's an "easy" target. I don't think he and his lawyer thought all of this up by themselves. The FED's are after who told them how to do it, I'm almost certain. At least one can hope that's the ploy. All that Law School and some running around Quantico made somebody at the FBI smarter than the average homo sapiens. But we'll see!
The Old Man
Standard Disclaimer: You'll need a bullet for that.
This scene is what middle Amerika has to look forward to when .Gov deciedes to expropriate half of their holdings!
Awww ain't it just so cute & adorable when the government gets so serious & accountable over its rising costs to the tax payers??? It's not like the cost of government run Defense, Education, Social Service, Debt Service or Medicine has spiralled out of control for the past 3 decades or anything like that?
Strap yurself in Patsy ...errr I mean Martin your about to take one big fall for over the US$100 Trillion in State Sponsored theft, graft, gouging & corruption that has taken place @ .gov over the past 35 years!
It looks from this bloomberg article that he made all his investors whole plus a good chunk of profit. His fraud seems to be a technicality, but there was no real harm done to any investor. Compared to wall street bankers that screwed millions of muppets this guy is a small fish, but good publicity for everyone involved.
He is going to pay dearly for not knowing the ways of the world and meddling in politics.
http://www.bloombergview.com/articles/2015-12-17/martin-shkreli-accused-...
Key Rules For Those Who Acquire Significant Wealth in Amerika
#1 Deny, Lay Low, and Shut Your Mouth
The Rest of the Rules: Obey Rule #1
Phew! they got Martin Shkreli. Now I can sleep tonight.
Somebody had to take the rap for a 2 million dollar album.
Hillary Clinton must be laughing her head off and rolling in bed with her lesbian lover on this one.
I read ZH for that kind of reporting. Thank you Tylers, my world would be quite empty without you <3 (and the sarc, let's not forget the sarc)!
Karl Marx must be turning in his grave
Capitalism breeds devils like these
Enemies of humanity
This guy seems like real dirt dick.
He could maybe hire David Boies to defend him and beat the rap.
Looks like he's wearing a Mark Zuckerberg Facefuck hoody. I smell endorsements to release this ratbastard.
Cash Rules Everything Around Me
The only CREAM he'll get is down the poop chute.
Wu-Tang Clan - C.R.E.A.M. - YouTube
Jim Cramer is getting nervous: BTFD
We wish u a merry X'mas....And we Wish u a X'mas with lots of new boyfriends. We wish u a big red opening and we wish u a big red ending....
Put options may be exciting.
Merry Christmas as well.
Let's look at your charitable contributions list within your Fund ledger. C'mon Jimmy, you have nothing to hide.
Jim Cramer's Charitable Trust Stocks | HOME | Current List of Jim ...
Lesson learned when an inmate offers to sell him a bar of soap for $5000.
Reading the actual indictment , which is written in very clear English, is a real hoot. I can't believe this douche has any money at all. The G-men must have spent a million hours on this thing.
All I can say is BOOYAH.