Please login to the form below

Not currently logged in
Email:
Password:

Turing CEO Shkreli arrested by FBI in securities fraud probe

Accused of illegally using stock from biopharma firm Retrophin to pay off debts

Turing Pharmaceuticals Martin ShkreliMartin Shkreli, the controversial chief executive of Turing Pharmaceuticals, has been arrested on charges that he committed securities fraud.

The Federal Bureau of Investigation (FBI) is investigating claims that Shkreli committed fraud by illegally taking stock from Retrophin - a biopharma company he started in 2011 - and using it to pay off debts incurred in his other business dealings, including hedge fund MSMB.

US Attorney Robert Capers said at a press conference yesterday that Shkreli - who has recently been appointed CEO at KaloBios Pharmaceuticals - ran his companies "like a Ponzi scheme, where he used each subsequent company to pay off defrauded investors in the prior company".

Capers stressed that the arrest does not relate in any way to Shkreli's activities at Turing and the pricing controversy surrounding his decision to inflate the cost of Daraprim (pyrimethamine), a drug used to treat the parasitic infection toxoplasmosis, by 5,000% after taking control of the privately-held company.

The move focused attention on the issue of escalating medicine costs and led to increased scrutiny of pharma company pricing policies by US lawmakers, and made Shkreli the poster child for greed and opportunism in the pharma industry.

In a statement, the US Attorney's Office for the Eastern District of New York said that Shkreli is charged with securities fraud, securities fraud conspiracy, and wire fraud conspiracy for three schemes designed to defraud investors in MSMB and to misappropriate Retrophin's assets.

Charged alongside Shkreli is Evan Greebel, a former partner at the New York office of Katten Muchin Rosenman who served as outside counsel to Retrophin. He is charged with wire fraud conspiracy for his role in the Retrophin scheme.

"The charges announced today describe a securities fraud trifecta of lies, deceit, and greed," said FBI assistant director-in-charge Diego Rodriguez.

"In the end, Shkreli and Greebel used a series of settlement and sham consulting agreements that resulted in Retrophin and its investors suffering a loss in excess of $11m."

32-year-old Shkreli was seen being bundled into a car by FBI agents in the early hours of the morning on Thursday, and was formally arraigned later that afternoon. Later in the day he was released on a $5m bail bond after pleading not guilty to the charges.

Share in KaloBios plummeted and were halted yesterday after losing more than half their value.

Article by
Phil Taylor

21st December 2015

From: Regulatory

Share

Tags

Featured jobs

Subscribe to our email news alerts

PMHub

Add my company
Synergy Vision

Synergy Vision believe in delivering medical communications that make a difference to healthcare professionals and patients. Our synergy of pharma...

Latest intelligence

Australian Flu and the dilemma of naming diseases
...
Wearables and Healthcare
What place do wearables have in affecting actual patient health outcomes and can they contribute to the NHS’s sustainability agenda? Or are they just the latest fad?...
What does a future-proof rep look like?
Businesses can no longer afford to push ahead with the traditional Key Account Management model....

Infographics