NEW YORK (CBS SF) — A jury has found Martin Shkreli guilty on two counts of securities fraud and one count of conspiracy to commit securities fraud, and not guilty on five other counts, in a trial that centered on the former pharmaceutical executive’s management of two hedge funds.
The decision rendered Friday ends five days of jury deliberations after a five-week trial in federal court in Brooklyn. Shkreli, a brash 34-year-old best-known for his belligerent personality – earning the nickname “Pharma Bro” – and for hiking the price of a life-saving drug, Daraprim, while CEO at Turing Pharmaceuticals.
“This was a difficult case primarily because of the anti-Shkreli sentiment, and to the extent that this jury acquitted Martin of five of eight counts, it is a real testament to trial by jury,” said Shkreli’s lawyer, Benjamin Brafman, in a statement outside the courthouse after the ruling.
“We’re not 100 percent pleased, but we’re 90 percent pleased,” Brafman added.
Shkreli was charged with eight separate counts of securities fraud, conspiracy to commit securities fraud and wire fraud, for his role managing a pair of hedge funds, MSMB Capital Management and MSMB Healthcare. He ran the two funds between 2009 and 2014, prior to becoming the CEO of Turing Pharmaceuticals.
The government alleged that Shkreli defrauded investors and lied about the funds’ performance, and that he later stole more than $11 million from another company he founded, publicly traded Retrophin (RTRX), to pay back those investors.
Shkreli told “lies upon lies,” including claiming he had $40 million in one of his funds at a time when it only had about $300 in the bank, Assistant U.S. Attorney Alixandra Smith said in closing arguments last week. Another prosecutor, Jacquelyn Kasulis, called him “a con man who stole millions.”
But the case was tricky for the government because investors, some wealthy financiers from Texas, condeded at the trial that Shkreli’s scheme actually made them richer, in some cases doubling or even tripling their money on his company’s stock when it went public. The defense portrayed them as spoiled “rich people” who were the ones doing the manipulating.
“Who lost anything? Nobody,” defense attorney Brafman said in his closing argument. Some investors had to admit on the witness stand that partnering with Shkreli was “the greatest investment I’ve ever made,” he added.
While Shkreli did not testify at his own trial, he was outspoken on social media and in front of reporters outside the courthouse, which led the judge to personally rebuke him and prosecutors to demand a gag order.
Shkreli remained defiant following his conviction on multiple counts, expressing satisfaction with the ruling. He also conceded to feeling anxious during the proceedings. “When you have the entire federal government, including Congress … it’s a scary feeling, it’s a daunting thing, to feel the weigh of the government on your shoulders.”
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, to $750 a pill. He subsequently defended the 5,000 percent price hike as “not greedy at all.”
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