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Martin Shkreli, Pharma CEO Accused of Price-Gouging, Arrested on Fraud Charges

Image: Martin Shkreli, Pharma CEO Accused of Price-Gouging, Arrested on Fraud Charges
In this Thursday, Oct. 1, 2015, file photo, carrying an image of Turing Pharmaceuticals CEO Martin Shkreli in a makeshift cat litter pan, AIDS activists and others are asked to leave the lobby during a protest highlighting pharmaceutical drug pricing. (AP Photo/Craig Ruttle, File)

By    |   Thursday, 17 Dec 2015 11:42 AM

Martin Shkreli, the pharmaceutical CEO decried for buying and raising the price of drugs earlier this year, was arrested by FBI agents Thursday on securities fraud charges stemming from his previous hedge fund work.

The charges, brought by federal prosecutors in Brooklyn, involve the 32-year-old's time as a manager for hedge fund MSMB Capital Management and his time as CEO of Retrophin Inc., a biopharmaceutical firm he launched in 2011, The Wall Street Journal reported.

"Mr. Shkreli is accused of misleading prospective investors in MSMB about his prior performance as a manager and the fund’s assets under management in order to induce them to invest. After their initial investment, Mr. Shkreli is accused in the indictment of further deceiving investors about the fund’s performance, which had lost money, leading them to think they’d earned huge profits," The Journal reported, citing the unsealed indictment.

Shkreli is also accused of using cash and stock from Retrophin to pay back investors when they wanted to take money out of the funds, as well as using company stock to illegally pay off unrelated debts, according to Bloomberg Business.

Retrophin fired Shkreli last year and the board filed a lawsuit against him for misuse of company funds.

Evan Greebel, a New York lawyer, was also arrested Thursday and accused of "conspiring with Shkreli in part of the scheme," Bloomberg reported.

As the head of Turing Pharmaceuticals, Shkreli made headlines earlier this year when he increased the price of Daraprim, a drug used by some AIDS and cancer patients and those with compromised immune systems, from $13.50 a pill to $750. His arrest had nothing to do with the so-called price-gouging.

He was also in the spotlight earlier this month when he was revealed as the owner of a one-of-a-kind Wu-Tang Clan album that he reportedly paid $2 million for at auction.

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Martin Shkreli, the pharmaceutical CEO decried for buying and raising the price of drugs earlier this year, was arrested by FBI agents Thursday on securities fraud charges stemming from his previous hedge fund work.
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2015-42-17
Thursday, 17 Dec 2015 11:42 AM
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