Martin Shkreli faces FTC contempt lawsuit in drug case

Martin Shkreli, former CEO of Turing Pharmaceuticals AG, center, pauses as he speaks to members of the media with his attorney Benjamin Brafman, right, outside federal court in the Brooklyn Borough of New York, US, on Friday, August 2. 4, 2017.

Peter Foley | Bloomberg | Getty Images

The Federal Trade Commission on Friday asked that notorious “pharma bro” Martin Shkreli be considered for going to court to form a new drug company in violation of a judge’s ban on the convicted fraudster from working in the pharmaceutical industry.

Shkreli, who was released from prison last year, was banned in February “for life directly or indirectly
participating in any way in the pharmaceutical industry “as a result of the FTC’s antitrust suit against him and a previous pharmaceutical company he founded.

That order stemmed from Manhattan federal court Judge Denise Cote’s January 2022 ruling that Shkreli oversaw an illegal scheme to maintain a monopoly on the life-saving drug Daraprim, which continued even while in prison for his conviction in an unrelated securities fraud case.

In its court filing Friday, the FTC noted that Shkreli announced in July the formation of a new company, Druglike, “which appears to be involved in the pharmaceutical industry.”

The filing cited Druglike’s press release about that announcement, which called the company “a Web3 drug discovery software platform co-founded by Martin Shkreli.”

The FTC said the company’s creation, as well as Shkreli’s failure to pay his nearly $25 million share of a $64.6 million judgment he is owed in the lawsuit, suggests that he is violating court orders in the case.

The FTC and a group of states suing Shkreli said in the filing that he failed to comply with their requests to turn over documents and submit to an interview as part of their investigation into whether his involvement with Druglike violates Cote’s order barring him from entering the industry.

The FTC said Shkreli is required by order of Cote to provide that information to the agency.

“Martin Shkreli’s failure to comply with the court order demonstrates a clear disregard for the law,” Holly Vedova, director of the FTC’s Office of Competition, said in a statement.

“The FTC will not hesitate to deploy the full extent of its authorities to enable a thorough investigation into any potential misconduct,” Vedova said.

Benjamin Brafman, Shkreli’s lawyer, declined to comment on the FTC’s filing.

Shkreli gained widespread infamy in mid-2015 when his drug company, now known as Vyera Pharmaceuticals, unapologetically raised the price of Daraprim, which is an anti-parasitic drug used to treat pregnant women, infants and people with HIV, more of 4,000%, from $17.50 per pill to $750.

in December 2015, federal prosecutors in Brooklyn, New York, criminally charged Shkreli in connection with defrauding investors in two hedge funds he previously ran and for manipulating the stock of another company he founded, Retrophin , which is now known as Travere Therapeutics.

Shkreli was convicted at trial in mid-2017 of several charges in the case. Her $5 million post-trial bond was revoked weeks later after a judge offered her Facebook followers a $5,000 cash reward if they provided hair samples of the former Democratic presidential candidate Hillary Clinton.

Shkreli was sentenced to seven years in prison in 2018. He was released to a federal halfway house last May.

Shkreli was driven back to New York from his prison in Pennsylvania by a friend, Edmund Sullivan, who had previously served on Retrophin’s board.

Sullivan is named in court documents in Shkreli’s criminal case as one of seven people who received, at Shkreli’s direction, thousands of shares of a shell company that Retrophin used as a vehicle to go public. Sullivan was not charged with a crime in the case.

Leave a Reply

Your email address will not be published. Required fields are marked *