The Federal Trade Commission, joined by seven state governments, has asked a federal judge to rule that Martin Shkreli is in contempt of court for allegedly flouting a 2022 order that banned him from the pharmaceutical industry for life.
According to a press release issued Tuesday, the former hedge fund manager, widely known as the “Pharma bro,” has publicly traded at least 60 pharmaceutical industry stocks since his release from prison in May 2022. Additionally, he has been “broadcasting his opinions about the business and management of many pharmaceutical industry companies,” the filing states.
The legal action seeks to force Shkreli to divest any pharmaceutical stocks he currently holds and to pay fines equivalent to his profits from those trades. The request specifies that prejudgment interest should be included and that Shkreli cannot offset the amount with any financial losses.
Furthermore, the filing urges the court to establish “clear and escalating consequences” for any future breaches, which could include financial penalties and possible incarceration.
FTC Commissioner Mark Meador emphasized the necessity of enforcement, stating, “A lifetime industry ban is only effective if breaches are met with consequences commensurate with the seriousness of the order.”
The original court order originated from findings that Shkreli orchestrated an anti-competitive scheme to maintain a monopoly on Daraprim, an anti-parasitic medication. In a move that drew widespread criticism, Shkreli raised the drug’s price from $17.50 per tablet to $750 per pill. Alongside the lifetime ban, he was ordered to disgorge more than $64 million.
A CNBC representative has requested comment from Shkreli’s legal team regarding the new allegations.
This civil proceeding is distinct from Shkreli’s criminal case, which resulted in his 2017 conviction for securities fraud tied to hedge funds and another drug company he founded. He was sentenced to seven years in federal prison in 2018 and released in 2022 after receiving credit for time served prior to sentencing and other judicial factors.
I still can’t believe someone got seven years for hedge fund fraud but not for price-gouging life-saving drugs.
60 stocks? He’s barely hiding it at this point. Hope the court fines him into oblivion.
Wait, does trading pharma stocks actually count as working in the industry? Seems like a legal gray area.
Good. He caused real harm with Daraprim, so enforcing this ban is long overdue.