Published: Sun, August 06, 2017
Markets | By Erika Turner

Martin Shkreli convicted of securities fraud, conspiracy

Martin Shkreli convicted of securities fraud, conspiracy

A Brooklyn jury on Friday found Martin Shkreli, the former hedge fund manager notorious for brazenly raising the price of a critical drug, guilty of defrauding his investors.

Federal prosecutors accused the hedge fund executive of cheating investors out of $11 million between 2009 and 2014, lying to investors about fund performance and using investor capital for personal uses.

Die-hard Wu-Tang fans surely won't mind seeing this verdict, given how Shkreli's been waving around his multi-million dollar purchase for years.

The prosecutor who presented the government's closing argument, Jacquelyn Kasulis, was serious, measured, the one who studied harder than anyone else for the test; she walked the jurors through a meticulous review of all the evidence the government had amassed, a process that lasted nearly four hours. The first two charges had good news for Shkreli: "Not guilty".

Shkreli became a lightning rod in 2015 when Turing bought the rights to sell Daraprim, a drug available since 1953 to treat a parasite infection, then raised its price to $750 a pill.

He was also known for his sometimes hours-long live streams on YouTube that often showed him engaged in mundane occupations such as petting his cat, although he also gave financial and chemistry lessons in the videos.

He faces up to 20 years.

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Christopher LaVigne, a former federal prosecutor who is now a defense lawyer at the law firm of Shearman & Sterling, said it was notable that prosecutors secured a conviction without investor losses, and said it could encourage more such cases in the future.

Wearing a short-sleeved dark polo shirt and khaki jeans, Shkreli flashed his trademark smile as he and his lawyers held an off the cuff news meeting outside the courthouse.

Shkreli faces a maximum prison sentence of 20 years. "We think verdict as it now stands, will permit this court to impose very lenient sentence", Brafman said. He joked that maybe prosecutors "found one or two broomsticks". "Because they recognized genius", Brafman said, adding that they had signed agreements that his client wasn't liable if they lost their money. Also found guilty of four other crimes.

"My case is a silly witch hunt perpetrated by self-serving prosecutors", he said on Facebook at one point.

Shkreli did admit that the case will make his future trickier to navigate.

"I'm going to focus not on what people say about me, I'm going to focus on how much more can I learn about medicinal chemistry", he said.

When challenged about his refusal to cooperate, he told a lawmaker: "I intend to follow the advice of my counsel, not yours".

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