And not only that. Shares of KBIO, the company Shkreli recently took over through an elegant and seemingly legal share-buying plan, plunged in today's trading. Unfortunately for KaloBios, shareholders realized its new CEO might find himself busy with other matters, including a possible ban from running a public company.
Update: Reviled pharma CEO Martin Shkreli has resigned (as CEO of Turing).
Thursday Humor: Lawyer For Martin Shkreli Hikes Fees 5,000%
Courtesy of Zero Hedge
Earlier today, the "most hated man in America", serial biotech entrepreneur and former Jim Cramer protege Martin Shkreli was arrested by the FBI.
As Shkreli reminded the world earlier this week while discussing an absurd plan to free an incarcerated rapper, coming up with $2 million in bail money is "no fucking problem," so we assume he'll be able to afford an OJ-esque legal team. Or will he?
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A bit of humor, via Andy Borowitz of The New Yorker
Lawyer For Martin Shkreli Hike Fees 5,000%
A criminal lawyer representing Turing Pharmaceuticals chief Martin Shkreli has informed his client that he is raising his hourly legal fees by five thousand per cent, the lawyer has confirmed.
Minutes after Shkreli’s arrest on charges of securities fraud, the attorney, Harland Dorrinson, announced that he was hiking his fees from twelve hundred dollars an hour to sixty thousand dollars.
Shkreli, who reportedly received the news about the price hike while he was being fingerprinted, cried foul and accused his attorney of “outrageous and inhumane price gouging.”
“This is the behavior of a sociopath,” Shkreli was heard screaming.
For his part, Shkreli’s lawyer was unmoved by his client’s complaint. “Compared to what he pays for an hour of Wu-Tang Clan, sixty thou is a bargain,” he said.
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Via Zero Hedge earlier today:
Martin Shkreli, “America’s Most Hated”, “Price Gouging” Biotech Mogul Arrested For Securities Fraud
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 reccurring 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). [Joe Campbell’s short was ended by his brokerage company, and he promised he would not play the dangerous game of shorting small biotechs again, but who knows. ~ ed.]
“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.
Full indictment here: ShKreli Indictment.
