Martin Shkreli, the guy everyone loves to hate, was recently sentenced for securities fraud last week in the U.S. District Court for the Eastern District of New York. He became well-known after he inexplicably and sharply raised the price of an essential HIV drug, Daraprim. As CEO of Turing Pharmaceuticals, Shkreli raised the price from $13.50 per pill up to $750.00 per pill. Despite being required to testify before Congress about this act, Shkreli’s conviction and sentence revolved around his time spent while he worked at MSMB Capital Management and Retrophin.
According to federal prosecutors, Shkreli was accused of engaging in multiple schemes to ensnare various investors, using lies and deceit. He had made bad decisions playing the stock market using his hedge funds, and then illegally paying those investors back in cash and stock from the pharmaceutical companies he had created. Prosecutors believed he was running a Ponzi scheme. He was also convicted of scheming to fraudulently inflate the stock price of Retrophin, which he founded in 2011 and was struggling. As part of his defense, his lawyer said that none of his investors actually were harmed by the conduct, and some even earned a profit. The jury ultimately found him guilty of two counts of securities fraud and one count of conspiracy to commit securities fraud. The judge also found that his crimes caused a loss of $10.4 million.
He was released on bail before sentencingHis lawyers had asked the court for leniency – a 12 to 18-month prison sentence. Prosecutors demanded at least 15 years. The judge is including time-served into his sentencing, reducing it by 6 months.
However, the judge also reviewed some damning emails that indicated Shkreli felt no remorse. He bragged in emails that he wouldn’t serve any real time in prison, and he cussed out the investigators on his case.
Perhaps one of the most frustrating clients a defense lawyer could have, Shkreli’s sentence serves as a reminder that when being tried for a crime, it is inevitable that your entire persona and character is also on trial. Your behavior should mitigate the crime – not make things worse.