′Pharma bro′ Shkreli′s trial begins as ex-pharma CEO faces allegations of cheating investors | News | DW | 29.06.2017
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'Pharma bro' Shkreli's trial begins as ex-pharma CEO faces allegations of cheating investors

Martin Shkreli could face 20 years in prison for securities fraud if found guilty. The ex-head of a pharmaceuticals firm is known for having bought rights to a life-saving medicine and raising its price by 5,000 percent.

Martin Shkreli's lawyer didn't downplay his client's pariah image before the court, as the former pharmaceutical and hedge fund CEO went on trial Wednesday for allegedly defrauding investors.

Instead, the defense portrayed him as a misunderstood genius.

"Martin Shkreli, despite all his flaws and dysfunctional personality, is brilliant beyond words," defense attorney Benjamin Brafman told jurors at a federal court in Brooklyn. "You may not like Martin Shkreli and you may have reasons to hate Martin Shkreli, but that is not a basis on which to convict."

Shkreli stands accused of misleading investors while at the helm of MSMB Capital Management, a hedge fund he headed between 2009 and 2012. He reportedly hid the firm's serious losses in a bid to lure investment. Then, after losing the money, he repaid disgruntled investors with $10 million (8.8 million euros) in cash and stock looted from Retrophin, a drug company that he founded in 2011.

"Rather than owning up to his lies and admitting his investments were a failure, the defendant doubled down by engaging in an even bigger fraud," Assistant US Attorney Karthik Srinivasan said, adding that Shkreli had headed a bogus hedge fund built on "lies on top of lies on top of lies."

"They got their money back only because the defendant stole from a public company, and it eventually turned out to be successful," the prosecution said, alluding to the fact that Retrophin ultimately grew to be worth $1 billion.

The defense hit back, saying that, while Shkreli's statements to investors weren't always "100 percent accurate," investors "were betting on his genius" rather than his words. 

While Shkreli often appeared bored and slumped in his chair during the jury selection process, he watched intently on Wednesday as his trial finally got under way. He reportedly even beamed at times when his lawyer spoke.

'Pharma bro'

Shkreli gained notoriety and attracted widespread resentment in 2015, when the subsequent pharmaceutical company he founded, Turing Pharmaceuticals, bought the US rights to sell a life-saving HIV medicine known as Daraprim for $55 million. His company then raised the price of the medicine by 5000 percent, from $13.50 to $750 per pill.

However, the criminal charges he faces are not related to the price hike.

The former pharmaceutical CEO's provocative attitude saw him dubbed "Pharma Bro" on social media. That was before he was booted off Twitter for trolling a female freelance journalist. He has also boasted about buying a one-of-a-kind album from the hip-hop group Wu-Tang Clan for $2 million.

Shkreli's troubled reputation saw the trial delayed by two days after the court struggled to find impartial jurors. Prospective jurors described Shkreli as "the face of corporate greed" and "a snake."

One dismissed juror is even reported to have said: "The only thing I'd be impartial about is what prison he goes to."

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Shkreli refuses to testify on drug price increases #05.02.2016

dm/gsw (AP, AFP, Reuters)

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