The Federal Trade Commission has asked a federal judge to hold Martin Shkreli, the former pharmaceutical executive better known as “Pharma Bro” in the 2010s, in contempt of court for allegedly publicly trading in pharmaceutical industry stocks and giving his opinion on the pharma industry, according to a press release from the federal agency.
Shkreli first became internet famous after raising the price of a life-saving drug Daraprim from $13.50 to $750 a pill and bragging about how that just made him a good businessman. But prosecutors saw it differently and said he was engaging in an illegal, anticompetitive scheme to restrict access to the drug. He was arrested in 2015, and convicted in 2017 on eight counts, including securities fraud.
Shkreli was out on bail between his conviction and reporting to prison but was sent to jail in 2017 after a Facebook post in which he said he wanted to acquire some of Hillary Clinton’s hair. The Secret Service took this as a threat.
Shkreli didn’t immediately respond to questions emailed Tuesday. When I emailed with Shkreli back in 2017 to ask him about potentially going to prison, the pharma bro turned our exchange into a trolling competition. He asked if I was “antifa” and wrote that “given we live in a trump presidency, life is basically nirvana.” One of his emails ended with “NOW SET ME UP WITH DAT WIFE OF URS.”
Shkreli also noted that the sentencing guidelines for his crime were 0-6 months so he could just do some leisure reading in prison and “make paper from inside,” a suggestion that he’d still be making money. In 2018, Shkreli was sentenced to seven years in federal prison and ultimately served about four years. He was banned in 2022 from trading any pharma stock and broadcasting his opinion on the business or management of pharma companies.
The FTC alleges that since his release Shkrlei has been “publicly trading in pharmaceutical industry stocks of at least 60 companies and broadcasting online his opinions about the business and management of many pharmaceutical companies,” despite his lifetime ban. The agency even quotes him saying on one of his many livestreams, “I’m showing you how to trade and invest in biotech.”
The FTC also alleges that Shkrlei has “used his livestreams to wage multiple public campaigns to short certain pharmaceutical company stocks based on his prediction that their key clinical trials would fail.” The federal agency has been joined by seven states in asking a federal judge to hold the pharma bro in contempt.
According to the FTC’s press release, Shkreli should:
- Divest any pharmaceutical company stocks he currently owns;
- Pay a fine equal to his profits from any pharmaceutical company stock trading (plus prejudgment interest) without the ability to account for offsetting losses; and
- Face clear and escalating consequences for any future violations, including financial penalties and potential incarceration.
“After a full trial, the court found that Martin Shkreli’s conduct drove up prescription drug costs for American patients and blocked the entry of lower-cost generics,” said Daniel Guarnera, Director of the FTC’s Bureau of Competition. When judgment is entered by a court, whether it’s a settlement or an order following a trial, defendants must fulfill their obligations. Today’s action should serve as notice that the FTC will not hesitate to enforce violations of court orders.”
