Pharma CEO who ‘ripped off’ HIV patients arrested on securities fraud charges
The former hedge fund manager who raised the price of an AIDS drug by 5500% has been arrested on securities fraud charges.
Martin Shkreli, the 32-year-old founder and chief executive of Turing Pharmaceuticals, came under fire after buying the rights to 62-year-old drug Daraprim.
The drug costs less than $1 per tablet to make, and is used to treat conditions including AIDS-related toxoplasmosis – but Shkreli raised the price by 5500%, charging $750 per pill.
Shkreli was arrested on Thursday morning by federal agents at his Manhattan home.
He is accused by federal prosecutors of using shell companies after his now defunct hedge fund MSMB Capital Management lost millions of dollars.
The accusations include using the complex shell game to make secret payoffs and to set up fake consultancy arrangements.
As well as Shkreli, New York lawyer Evan Greebel was also arrested on Thursday, suspected of having conspired with the former hedge fund manager.
Biotech firm Retrophin has sued Shkreli in federal court, making the allegations about transactions between the company and MSMB, while Shkreli was still at the firm.
It alleges that Shkreli used fake consultancy arrangements to pay off investors in MSMB, who lost money after a bad trade with Merril Lynch in 2011 which lost the company $7 million.
Lawyers for Shkreli and Retrophin have not released statements since the arrests.
After initially saying he would reduce the Daraprim pricing, he later changed his mind. He responded to a tweet from Hillary Clinton criticising him for the price hike simply saying: “Lol”.
He later found a new group of people to troll: fans of hip-hop collective the Wu-Tang Clan.