Martin Shkreli and the Temptations of Self-Dealing

December 18, 2015 8:58 PM

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A few months ago, Martin Shkreli, the thirty-two-year-old founder and former C.E.O. of Turing Pharmaceuticals, became a poster child for everything that’s wrong with American business when his company raised the price of its drug Daraprim, which is used to treat life-threatening parasitic infections, by a cool five thousand per cent. But, while Shkreli had to weather plenty of bad publicity, he had a ready-made defense: though his strategy for Daraprim may have been egregious, it was also perfectly legal. Unfortunately for Shkreli, the same cannot be said of securities fraud and wire fraud, the crimes with which he was charged on Thursday. The government’s indictment alleges that Shkreli deceived investors in hedge funds that he ran prior to founding Turing, and that he paid some of his hedge-fund investors back with money that he took from Retrophin, a biopharmaceutical company he started in 2011. (Shkreli denied the charges, and was released on a five-million-dollar bond. On Friday, he resigned as Turing’s C.E.O.)

During the Daraprim uproar, Shkreli was often represented as a kind of evil genius. But what’s striking about most of the offenses the government says he committed earlier in his career is just how straightforward and unsophisticated they seem. After he started a hedge fund called MSMB Capital, in 2...

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