Image via the Star Tribune
Pharma-brochacho and proud owner of Once Upon a Time in Shaolin Martin Shkreli is in the news once again. The infamous founder of Turing Pharmaceuticals was arrested last week on charges of security fraud and has been removed as CEO of the drugmaker KaloBios Pharmaceuticals ( KBIO ).
(Also read, " Did the Wu-Tang Clan Rat Out Martin Shkreli to SEC? " for more information on the arrest.)
He was charged with securities fraud and conspiracy for setting up a Ponzi-like scheme at his former hedge fund MSMB Capital Management and Retrophin Inc. ( RTRX ), a firm he managed before founding Turing Pharmaceuticals. Prosecutors say that from 2009 to 2014, Shkreli lost some of his hedge fund investors' money through bad trades. To pay back his disgruntled clients, he allegedly looted $11 million from Retrophin, where he was CEO.
"As alleged in the indictment, Shkreli essentially ran his companies like a Ponzi scheme, where he used each subsequent company to pay off the defrauded investors in the prior company," U.S. Attorney Robert Capers said on Thursday, per CNBC .
Shkreli was already considered an American villain because he raised the price of a life-saving drug from $13.50 to $750 per pill. Turing announced on Friday that Shkreli has resigned as the company's CEO and it had appointed a new interim chief executive.
Back on November 19 th of this year, an investor group led by Shkreli acquired 70% of the outstanding shares for KaloBios Pharmaceuticals . At the same time, KaloBios also announced Shkreli's appointment as CEO.
Shkreli, through his press relations firm, said he is confident he will be cleared of all charges, adding that some of the charges involved "complex accounting matters" that authorities failed to understand.
If convicted of securities fraud, Shkreli could face upwards of 20 years in prison.