The Brooklyn prosecutors who won a guity verdict against former pharmaceutical CEO Martin Shkreli over the summer are demanding the “Most Hated Man in America” forfeit $7.4 million in cash and assets as part of his punishment.
In order to do this, Bloomberg says Shkreli will likely need to surrender the $5 million bail he posted in late 2015, and the one-of-a-kind Wu Tang Clan album he purchased for more than $2 million shortly before his former company, Turing Pharmaceuticals, was exposed for hiking the price of Daraprim, a live-saving AIDS drug, by 5,000%.
Shkreli tried to sell the album on eBay back in September. He managed to secure a winning bid of more than $1 million, but was abruptly jailed before he could work out the details with the winning bidder. Prosecutors asked that Shkreli’s bail be revoked after he published messages about Hillary Clinton that prosecutors felt were threatening in nature. Shkreli maintained that they were satirical.
Shkreli was convicted in August on three counts of fraud related to a scheme where he tried to make investors in his two failed hedge funds whole by hiring them as “consultants” at Retrophin, the pharmaceutical company Shkreli founded before Turing.
In their filing, the prosecutors list assets they could possibly take. Among them are the Wu-Tang Clan album, a Picasso painting, an Enigma machine from World War II, and Shkreli’s remaining interest in Turing.
Long before his conviction, Shkreli’s purchase of the album sparked outrage among music fans. The former biotech CEO played short excerpts while live-streaming himself in his Manhattan apartment after President Donald Trump’s election and his conviction. These are the only known instances where the album was heard publicly. Furthermore, some Wu Tang associates have raised doubts about whether the album is a true Wu-Tang release.
"We will vigorously oppose the government motion," Shkreli’s lawyer, Benjamin Brafman, said in an email. "Our position is clear. None of the investors lost any money and Martin did not personally benefit from any of the counts of conviction. Accordingly, forfeiture of any assets is not an appropriate remedy."
Detectives in New York and Los Angeles have been hinting for weeks that they’re close to arresting disgraced studio head Harvey Weinstein for one of any number of credible sexual assault claims that both fall within the statute of limitations and involve accusers who can provide the evidence prosecutors need to make pursuing a case worthwhile.
As the various investigations into Weinstein wend toward completion, the Guardian is reporting that police departments in several disparate jurisdictions are collaborating to help strengthen their cases and ensure that the maximum number of prosecutable cases are brought against the one-time mogul.
Detectives in several cities investigating Harvey Weinstein for sex crimes are likely to be collaborating as they build evidence and assess whether the film producer can be arrested and charged, experts believe.
Investigators in New York, London and Los Angeles have opened criminal cases against Weinstein in the last six weeks, as the disgraced producer faces lawsuits on both sides of the Atlantic following a flood of accusations of sexual misconduct.
Los Angeles police department (LAPD) detectives have interviewed witnesses in preparation for presenting a case to the district attorney’s office. The DA will then decide whether to press criminal charges over accusations that Weinstein raped an unnamed actress in a hotel in Beverly Hills in 2013, according to David Ring, a lawyer for the alleged victim.
Many believe the NYPD will be the first to act, if only because Manhattan District Attorney Cyrus Vance Jr. quashed an earlier investigation into Weinstein before accepting a campaign donation from Weinstein lawyer David Boies. The LAPD and Beverly Hills police are also expected to pursue criminal charges. But police in London are also reportedly preparing to file charges based on the testimony from three women who’ve accused Weinstein of rape.
Of course, as we’ve pointed out in the past, the pending criminal cases against Weinstein are only the beginning of his legal problems. Many of the more than 80 women who have come forward to accuse Weinstein of sexual assault or harassment plan on filing civil suits, which are much easier to prove than criminal cases, and often result in out-of-court settlements.
The first civil suits targeting Weinstein, and his former company Weinstein & Co. for abetting his monstrous behavior, are already being filed.
The sheer volume of complaints against Weinstein, Christensen said, will be much more easily introduced in civil cases, where rules about evidence involving a defendant’s character and the standard of proof are less stringent than in criminal court.
The UK lawyer Jill Greenfield is expected to file civil lawsuits on behalf of a number of women in the high court in London in due course, having written to Weinstein demanding settlements but without hearing back so far.
People are contacting me,” she said. “I’m expecting to coordinate a claim for a number of victims."
Following the decision not to charge Weinstein in connection with her case, Ambra Battilana Gutierrez signed an agreement in which the film producer paid her $1m.
“I thought I needed to support my mom and brother, and how my life was being destroyed, and I did it,” she told the New Yorker earlier this week.
The actor Dominique Huett filed the first civil suit since complaints against Weinstein came pouring out in early October, in the New York Times. She is claiming $5m in Los Angeles superior court, alleging that the Weinstein Company “aided and abetted” Weinstein in “repeated acts of sexual misconduct".
Of course, Weinstein has been hiding from the world – reportedly wearing disguises when he ventures out in public – communicating with the world only through his defense attorneys, Ben Brafman and Blair Berk. With penury and incarceration looking almost inevitable at this point, he’ll need all the legal guidance he can afford.
While former Turing Pharmaceuticals CEO Martin Shkreli languishes inside a federal jail in Brooklyn, the trial of his former attorney - and alleged co-conspirator - Evan Greebel is just beginning, with the defense and prosecution giving opening statements Friday.
The timing is unfortunate. Shrekli’s trial - which ended in him being convicted of three out of eight counts of fraud - briefly revived the public rancor over his many misdeeds. Given Shkreli’s toxic public image, it comes as no surprise that Greebel’s lawyers are already seeking to distance their client - who was arrested on the same day as Shkreli and whose picture was splashed across cable news networks alongside Shkreli’s - from the disgraced pharma executive, who was jailed last month after a judge revoked his bail following a series of controversial and vaguely threatening Facebook posts,Bloomberg reported.
As many will remember, Shkreli’s comfortable life as a successful young pharmaceutical CEO began to unravel in September 2015 when the New York Times reported that Turing had hiked the price of a life-saving toxoplasmosis drug by 5,000%, thrusting Shkreli into an uncomfortable public spotlight and drawing a public rebuke from Hillary Clinton, then presumed to be the next president of the United States.
Following his indictment, Shkreli seemingly set out to destroy any lingering public sympathy by antagonizing the federal government and harassing female journalists - actions that ultimately led to his jailing. Prosecutors have accused Greebel of helping Shkreli steal $11 million from Retrophin, a pharmaceutical company Shkreli founded and ran before being forced out in 2014. Greebel was terminated as Retrophin’s counsel soon after.
Shkreli allegedly used the money, along with Retrophin stock, to repay investors in two failed hedge funds by signing them on to sham consulting agreements with salaries and stock grants. Greebel is also accused of helping Shkreli manipulate the price of Retrophin stock.
Fortunately for Greebel’s defense team, their client has a somewhat more resepectable public image than his associate. He has a family and was once a partner at Katten Muchin Rosenman LLP and Kaye Scholer LLP. They’re essentially trying to sell a narrative of him being a quiet family man who got in over his head.
In opening statements on Friday, Greebel’s lawyer told jurors that the 44-year-old father of three and Shkreli, a former biotech executive notorious for aggressive drug-pricing tactics, were as "different as two people can be." Greebel was by no means Shkreli’s "right-hand man," defense lawyer Reed Brodsky told jurors at the trial in Brooklyn, New York.
Greebel “lived a quiet life,” Brodsky said, while Shkreli was "cultivating this public personality and persona, blogging and tweeting.”
It’s no mystery why Greebel, a former corporate lawyer, would want to separate himself from Shkreli, who is in jail after his conviction for lying to hedge fund investors (although jurors weren’t told about that). Greebel wants to show that Shkreli lied to him as well, and that Greebel had no reason to believe he was being asked to do anything wrong.
"Mr. Shkreli is kind of a contradiction," Brodsky said, arguing that Shkreli managed to con people with his "image" of success, brilliant ideas and "photographic memory."
Meanwhile, prosecutors allege he knowingly helped Shkreli loot his company and manipulate its share price for profit.
In the government’s opening statement, Assistant U.S. Attorney David Kessler said Greebel started working for Shkreli’s companies around 2011 and used his legal talents to aid Shkreli’s fraud. Kessler said Greebel wanted to please Shkreli to make millions of dollars in fees for his firm.
"Agreeing to help the CEO of a company steal from the company is a crime," Kessler said. "Agreeing to help illegally control the stock market is a crime."
As Bloomberg noted, Greebel’s demeanor in court couldn’t have differed more from Shkreli’s. He sat quietly by his defense team, smiling briefly but otherwise remaining expressionless.
Meanwhile, Shkreli’s was on the receiving end of more bad news this week when a Brooklyn judge refused to return his $5 million bond, saying the money might be needed to offset any monetary penalties that may be levied against Shkreli, the New York Post reported.
Shkreli’s lawyer Ben Brafman asked her to release the money so his client — No. 14 on New York state’s list of top delinquent taxpayers — can start paying taxes.
Martin Shkreli might not be able to sell that Wu Tang Clan album after Federal prosecutors late Thursday moved to revoke his bail, claiming that the former pharmaceutical company CEO and purported “most hated man in the world” repeatedly threatened and harassed former secretary of state Hillary Clinton on line.
Specifically, the Feds were incensed by what Shkreli says was intended to be a humorous post on his Facebook page offering a $5,000 bounty to anyone who could “grab” some of Clinton’s hair for him during her upcoming book tour.
"Shkreli"s latest threat is concerning not only because it has required a significant expenditure of resources by the United States Secret Service, which is charged with protecting Secretary Clinton, but also because there is a significant risk that one of his many social media followers or others who learn of his offers through the media will take his statements seriously — as has happened previously — and act on them," prosecutors wrote in a legal motion.”
US District Court Judge Kiyo Matsumoto, who presided over Shkreli’s trial which ended in him being convicted on three of eight counts of securities fraud-related offenses, ordered his legal team to file a response. She scheduled a Sept. 14 hearing for legal arguments on the issue.
Here"s the post in question:
True to form, Shkreli trolled prosecutors in response published to his Facebook page: "Hillary Cliinton"s presumptive agents are hard at work. It was just a prank, bro! But still, lock HER up. Spend your resources investigating her, not me!!"
According to USA Today, prosecutors also said Shkreli had continued to harass journalist Lauren Duca.
Shkreli had previously been banned from Twitter earlier this year, allegedly for harassing Duca, a freelance writer who had authored an opinion essay that criticized President-elect Trump. The day before his verdict, Shkreli wrote in a Facebook post: "trial"s over tomorrow, b****. Then if I"m acquitted, I get to f*** Lauren Duca."
Secret Service agents sought to question Shkreki about his post, but he declined to meet with them, prosecutors wrote.
In what sounds to us like they’re reaching for justification, prosecutors cited a USA Today story recounting how a graduate student solved a complex mathematical proof after Shkreli offered a $40,000 scholarship to anyone who could.
"Shkreli"s own prior actions, and his influence over others who have previously acted in reliance on his statements, demonstrate why the government views his latest actions with concern," prosecutors concluded in their bail revocation motion.
According to Bloomberg, Shkreli edited the Facebook post, saying it was "satire, meant for humor” after it was reported in the media.
His lawyer, Benjamin Brafman, said that while Shkreli’s posts may have been “inappropriate,” his client didn’t intend to harm anybody.
“We take the matter seriously and intend to address the issue responsibly,” Benjamin Brafman, a lawyer for Shkreli, said in an email Thursday night. “However inappropriate some of Mr Shkreli’s postings may have been, we do not believe that he intended harm and do not believe that he poses a danger to the community.”
Is it really any surprise that federal prosecutors in Brooklyn, where Hillary Clinton’s presidential campaign was based and where Clinton friend (co-conspirator?) and former Attorney General Loretta Lynch once served as US attorney, are unwilling to let a joke about Clinton slide? Even if Shkreli remains free, the complaint is sure to cost him tens of thousands more in legal fees. Perhaps that"s the ultimate goal.
The trial of former Turing Pharmaceuticals CEO Martin Shkreli has been temporarily halted by Judge Kiyo Matsumoto after Shkreli’s lawyer objected emphatically as the prosecution planned to show jurors documents it claims are evidence of fraud committed by Shkreli, without calling witnesses to back them up, according to CNBC.
The documents allegedly detail payments that Shkreli"s drug company made to investors in two hedge funds he ran, as well as supposedly bogus consulting agreements he signed with some of his former investors entitling them to a salary and shares in Retrophin, a pharmaceutical company he co-founded and briefly led, according to CNBC.Jurors were given the rest of Wednesday off, as well as Thursday, to allow both the defense and prosecution time to file legal briefs on their arguments for and against requiring witnesses for the relevant documents. Testimony is expected to resume Friday, CNBC reported. Benjamin Brafman, the celebrity defense attorney representing Shkreli, said denying him the opportunity to cross examine people involved with the documents would be tantamount to denying Shkreli his constitutional right to confront witnesses against him.
The documents included settlement agreements that Shkreli reached with investors at two of his hedge funds, as well as consulting agreements with some of those investors. Among the settlement agreements in dispute Wednesday included the terms of what investors received from Retrophin in exchange for dropping any claims against Shkreli and his hedge funds.
Shkreli is facing eight counts of wire and securities fraud stemming from his brief stint as a hedge-fund manager. Specifically, the prosecution is examining communications between Shkreli and several former investors in his fund for evidence Shkreli misled them about his qualifications, investment returns and other details like his investing track record and the amount of money he managed. The prosecution also alleges that Shkreli falsified documents and backdated payments to corroborate his lies. Finally, prosecutors claim Shkreli defrauded Retrophin, which he founded in late 2012 just as his career as a money manager, CNBC reported.
Many of the witnesses called by the prosecution so far have described feeling betrayed by Shkreli. Some described Shkreli’s repeated evasions – he allegedly told one witness that he was “too busy” to give him his money back after starting Retrophin. Judging by the witnesses who’ve testified so far, it appears that many of Shkreli’s investors were small business owners who had invested between $100,000 and $300,000. After several investors threatened to sue, Shkreli allegedly offered to repay them using Retrophin’s resources. In addition to criticizing Shkreli for his dishonesty and strange behavior, many of the witnesses also admitted that they ultimately made money investing with Shkreli.
Matsumoto, the judge, indicated that she was sympathetic to the defense"s argument that settlement and consulting agreements should only be shown to jurors if a person who received those agreements takes the witness stand.
"I do think the fundamental right to confront the witnesses and question the witnesses is important," Matsumoto said.
If prosecutors are allowed to introduce the documents to jurors without calling related witnesses, they could rest their case soon. The trial began late last month, and is expected to last as long as six weeks. But if Matsumoto bars that method, prosecutors could be forced to call additional witness stand, meaning they would be unlikely to rest their case until next week sometime.
The prosecution in the trial of former Turing Pharmaceuticals CEO Martin Shkreli called more investors to testify about alleged malfeasance by Shkreli during his time as a hedge-fund manager on Monday. And while two witnesses echoed earlier descriptions of Shkreli being evasive when investors asked for their money, both ultimately admitted that they were paid back with interest.
One corroborated an earlier witness’s claim that Shkreli became evasive when asked to return clients’ money, stalling for more than a year before making investors whole with questionable payouts from Retrophin, the pharmaceutical company he co-founded, as well as grants of Retrophin stock, which is now worth $20 a share.
Another played into the portrayal of Shkreli that defense attorney Benjamin Brafman has sought to sell to the jury: That any liberties taken by Shkreli were ultimately made in good faith, but his clients’ odd behavior and personality quirks at times caused friction between him and his clients.
Schuyler Marshall, chairman of the board of the real estate company Rosewood Corp, said the former drug company executive reminded him of Dustin Hoffman"s autistic character in the movie "Rain Man," according to Reuters. Though Marshall added under cross-examination by Shkreli"s lawyer, Benjamin Brafman, that he was not claiming Shkreli was autistic.
""The reference here was that this was just an intensely focused, bright guy who knew his stuff,"" Marshall told jurors. Hoffman"s character in the 1988 film is an autistic savant with exceptional mental abilities but difficulty relating to other people.
Like other investors who have testified in the trial, Marshall, who invested more than $200,000 in MSMB Capital, said that while Shkreli misled him about the fund"s operations, he did not lose money. At one point, Marshall testified, he even used the phrase "no harm, no foul" in a communication with Shkreli.
"He paid back my investment and then some," Marshall said.”
Shkreli is being tried on eight counts of securities fraud and wire fraud related to his time running two hedge funds, MSMB Capital and MSMB Healthcare, and a pharmaceutical company he founded called Retrophin. In particular, Shkreli has been accused of falsifying investor statements, backdating documents and misleading investors about his record as a fund manager. He also allegedly misstated how much money was in the funds, according to prosecutor G. Karthik Srinivasan, who, in his opening statement, accused Shkreli of being a “con man” who managed to convince his investors that he was “a Wall Street genius.”
Last week, judge Kiyo Matsumoto hit Shkreli with a partial gag order, prohibiting him from talking about his case in or around the Brooklyn courthouse after he went on a rant to reporters gathered there last week. The order leaves him free to speak with journalists and conduct his marathon livestreams on YouTube.
Another witness on Monday, the seventh day of a trial that’s expected to last for as long as six weeks, was somewhat less charitable.
Richard Kocher, 65, told a Brooklyn federal jury Monday that his construction business saw a deal fall apart while he begged Shkreli to return his investments in a hedge fund, but the former pharmaceutical executive told him he was too busy running his new drug company, according to Bloomberg.
Kocher told the Brooklyn jury that, in one of his first forays into the hedge fund world in early 2012, he put $100,000 into Shkreli’s fund because he was assured investors could get their money back anytime. In May 2012, Kocher said he bailed out the fund, putting in another $100,000 after one of Shkreli’s employees told him it had a shortfall. Shkreli announced in September of 2012 he was closing his funds to focus on Retrophin Inc., but promising customers a full refund or shares in the startup pharmaceutical company.
Kocher pleaded for his money for five months but said he got a “run around” and Shkreli only offered 23,654 shares of Retrophin stock, which at the time he couldn’t sell.
“When you were in trouble and needed $100,000, I wired it over to you the next day,” Kocher wrote Shkreli in a March 2013 email. “I expect to get, in addition to this (insulting) untradable stock” my money back,he wrote.
However, Kocher too was eventually paid back…with interest. Though he says it"s hard to say if he ultimately came out ahead, given the opportunity costs.
“Shkreli eventually returned Kocher’s investments. Kocher also sold the Retrophin stock, after several years, making about $350,000 in total profit. But Kocher said he had to pay a lawyer, lost a business deal and lost time from his business, so he’s not sure if he ended up ahead.”
If convicted, Shkreli could face up to 20 years in prison. He has repeatedly proclaimed his innocence.
Benjamin Brafman, attorney for former Turing Pharmaceuticals CEO Martin Shkreli has based Shkreli"s defense on the notion that, while his client may have misled investors in hedge funds and pharmaceutical companies that he controlled, most of them made money thanks to Shkreli"s business acument and investing prowess.
Even Sarah Hassan, a witness for the prosecution, admitted as much when she testified that Shkreli paid her back with $400,000 in cash, plus shares in Retrophin, a biotech company founded by Shkreli – though Shkreli’s repeated evasions felt like “a betrayal.”
And on Wednesday, testimony from another witness supported Brafman’s assertion: Darren Blanton, a Dallas-based biotechnology investor, told the jury that, although Shkreli lied to him repeatedly about his investing track record and the amount of capital he managed, the former pharma entrepreneur helped him make millions in profits.
“Darren Blanton, a Dallas-based biotechnology investor who appeared in Brooklyn federal court as a witness for U.S. prosecutors, told jurors he invested in Shkreli"s hedge fund MSMB Capital after being told the fund was managing $35 million in assets and had an independent auditor.
He said he later learned both of those claims were false and found Shkreli evasive when he tried to get some of his money back. Blanton said he eventually filed a whistleblower complaint with the U.S. Securities and Exchange Commission.
Under cross-examination by Shkreli"s lawyer, Benjamin Brafman, Blanton conceded that despite his misgivings, his $1.25 million investment with Shkreli paid off, largely through an agreement in which Shkreli gave him shares in his drug company Retrophin Inc.”
Blanton said he still holds 150,000 shares of Retrophin, a biotech company that Shkreli co-founded ad briefly ran before being pushed out by the board. Blanton’s stake is worth nearly $3 million at Wednesday"s closing price of $19.83 per share.
And – in an admission that’s sure to tug at the jury’s heartstrings - Blanton said Shkreli founded Retrophin after learning that a friend of Blanton"s had lost a son to a rare disease, myotubular myopathy, and vowed to find a cure. Brafman"s cross-examination is expected to continue Thursday.
Shkreli, 34, gained notoriety in 2015 when he raised the price of a life-saving drug by 5,000 percent as CEO of Turing Pharmaceuticals, sparking outrage among patients and US lawmakers and leading the press to brand him "the most hated man in America." Shkreli has since embraced the role of provocateur, reveling in the negative publicity. His Twitter harassment of freelance journalist Lauren Duca led to him being banned from the social media platform, according to Reuters.
Federal prosecutors on Monday asked judge Kiyo Matsumoto for a gag order to prevent Shkreli from speaking with the press, claiming that he risks tainting jurors’ opinions by waging his own publicity campaign independent of the advice of his defense counsel. The request came after Shkreli lambasted the prosecution as incompetent and "junior varisty" during an impromptu conference with reporters.
The prosecution is alleging that, though Shkreli went to great lengths to ensure that all the investors in his fund were made whole, he still committed fraud by looting money from Retrophin to pay them back. Shkreli’s trial is expected to last between four and six weeks.
Prosecution called its first witness in the trial of former Turing Pharmaceutical CEO Martin Shkreli on Thursday. The witness, a former investor in one of Shkreli’s funds, alleged that Shkreli misled her about the fund’s performance, touting returns that were “too good to be true.”
The witness, Sarah Hassan, told jurors that she invested $300,000 with Shkreli in 2011 after being told he was “a rising star in the hedge fund world” who managed $40 million. She said she was thrilled when Shkreli reported she made nearly $60,000 that year alone, according to the Associated Press. However, she said those returns far overstated Shkreli’s performance; in fact, the fund lost money. A year later, Shkreli told her that he was using all the assets in the fund to start up Retrophin. When she tried to get her investment back, he stalled for months before forcing her into a settlement that included shares of Retrophin and $400,000 cash, she said.
Day 4 of #Shkreli trial underway. First witness, Sarah Hassan, 27-year-old daughter of Fred Hassan, just took the stand. Govt questioning
“To hear over a year later that the cash was gone, it was upsetting,” Sarah Hassan testified as the first witness at Shkreli’s securities fraud trial in federal court in Brooklyn. “I saw that as being my cash. It was just not right.”
"To be frank, I felt somewhat betrayed at this point," Hassan, 27, told jurors in Brooklyn, New York, federal court. "I was told I could get my cash from the fund months ago."
It’s unclear whether Hassan is the same government witness who was allegedly threatened by a member of Shkreli’s family, as Bloomberg reported last week.
The defense has countered that the federal government unnecessarily frightened three of the defense’s witnesses after FBI agents repeatedly tried to contact them. *** The Shkreli trial is just getting started, but already there have been more than a few interesting twists. The trial was supposed to begin Monday, but, thanks to Shkreli’s reputation as “the most hated man in America,” the jury selection process consumed two full days as the defense meticulously interviewed 250 potential jurors, with many claiming they would be unable to issue a fair judgment thanks to Shkreli’s reputation as the “pharma bro” who hiked the price of lifesaving AIDS drug Daraprim by 5,000%.
* * *
MedCity, a pharma blog that"s covering the trial, published a ranking of the top five excuses potential jurors used to get out of jury duty - one juror was excused for saying Shkreli "looks like a dick." Another said he couldn"t be impartial because Shkreli "disrespected the Wu Tang Clan."
“In my head, I said, ‘That’s a snake,’” one woman told attorneys, perhaps the most iconic comment to date.
“Honestly? Because he kind of looks like a dick,” another juror said more bluntly, explaining his bias to the judge. The individual was reportedly familiar with Shkreli’s ownership of the sole copy of the Wu-Tang Clan album “Once Upon a Time in Shaolin,” purchased through an online auction in 2015 for $2 million.
“He disrespected the Wu-Tang Clan, so…” On a related note, CNBC reported that on day three a potential juror also brought up the issue and the aftermath, in which Shkreli leaked the record.
“In this particular case, the only thing I’d be impartial about is what prison he goes to” — another gem from day three.
And finally; “I am,” from the man Judge Matsumoto asked directly “Are you concerned for your safety?”
* * *
However, in a sign of hope for the embattled Shkreli – who is facing up to 20 years in prison if convicted - defense lawyer Benjamin Brafman has hit upon a novel defense strategy, according to the New York Times.
Brafman, a celebrity criminal defense lawyer known for representing Sean “P Diddy” Combs, Charles Kushner, and former Mafia boss Sammy the Bull Gravano, is claiming that much of the public’s hostility toward his client stems from Shkreli’s odd behavior, which he implied could be related to his client being mildly autistic - though it"s unclear if a doctor has diagnosed him as such.
They’re calling it: The “Born This Way” defense, after the 2011 Lady Gaga hit single celebrating LGBTQ youth:
“An odd duck. Perhaps Autistic. Weird. Maybe with Asperger’s. A guy who shuffled around his office in bunny slippers with a stethoscope around his neck because he felt comfortable that way. This is how Martin Shkreli was portrayed on Wednesday for his trial on fraud charges – by Benjamin Brafman, his own lawyer.
“Is he strange? Yes,” Mr. Brafman said of his client. But he added, “every single government witness will concur that Martin Shkreli, despite his flaws and his personality, is brilliant beyond words.”
Brafman also pushed back against the defense’s claims, arguing that none of Shkreli’s investors lost money. In fact, Brafman told the jury they made money thanks to Shkreli’s financial prowess.
Shkreli is being tried on eight counts of securities fraud and wire fraud related to his time running two hedge funds, MSMB Capital and MSMB Healthcare, and a pharmaceutical company he founded called Retrophin.
In particular, Shkreli has been accused of falsifying investor statements, backdating documents and misleading investors about his record as a fund manager. He also allegedly misstated how much money was in the funds, according to prosecutor G. Karthik Srinivasan, who, in his opening statement, accused Shkreli of being a “con man” who managed to convince his investors that he was “a Wall Street genius.”
Prosecutors alleged that the string of events that led to Shkreli’s arrest began with a bad trade at his first hedge fund, MSMB Capital. Shkreli lost millions of dollars on a trade that put the fund in the red.
Around the same time, Shkreli founded MSMB Healthcare, a second fund, and Retrophin, a pharmaceutical company. Shkreli allegedly told his investors they could have their money back in cash or Retrophin stock, and when a couple of investors threatened to sue, Shkreli hired them as consultants at Retrophin.
“Retrophin owed these investors nothing – the defendant owed these debts,” Srinivasan said.
As Brafman noted, since Shkreli"s departure, Retrophin has become enormously profitable - it"s now worth about $700 million, and, Brafman said, the board is still "raping" the company. Brafman also argued that the board"s treatment of Shkreli was unceasingly cruel, saying they mocked him and questioned his sexuality - all for being "different."
Investors may have made their money back, but Shkreli still committed fraud, the prosecution countered.
The trial is expected to last between four to six weeks.
