Crimeupdated 58m ago2 min read
FTC And Seven States Seek Contempt Against Martin Shkreli For Violating Lifetime Pharma Ban
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FTC and seven states allege Shkreli flagrantly violated lifetime pharma ban by trading pharmaceutical stocks. They filed to hold him in contempt in SDNY, citing livestreams and commentary about pharma.
11 outlets told this the same way.
Contempt bid in New York
The Federal Trade Commission and seven states asked a federal judge in the U.S. District Court for the Southern District of New York to hold Martin Shkreli in civil contempt for allegedly “flagrantly and repeatedly” violating a 2022 lifetime ban from the pharmaceutical industry.
The filing alleges Shkreli traded shares of at least 60 pharmaceutical companies since he left prison in May 2022 and used livestreams and posts on YouTube, X, and Reddit to share his views on how drugmakers are run.
The FTC and the states sought an order forcing Shkreli to divest from pharmaceutical companies and pay a fine equal to his profits from trading pharmaceutical company stocks, with “clear and escalating consequences” for future violations.
The FTC and the states also asked the court to impose escalating penalties that could include incarceration, and the commission voted 1-0 to approve the filing with Chairman Andrew Ferguson recusing himself.
Ban terms and livestream claims
The 2022 injunction bars Shkreli from “directly or indirectly participating in any manner in the pharmaceutical industry,” and it specifically prohibits owning a stake in a drug company or trying to influence how it is managed. The contempt filing alleges Shkreli told viewers, “I’m showing you how to trade and invest in biotech,” while livestreaming his trades.
The filing also alleges Shkreli described his “magic trick” as, “It doesn’t matter what trades I make because I can always find a couple of biotech stocks to smoke.” The filing further alleges Shkreli ran public campaigns to short certain drug stocks, predicting their key clinical trials would fail, and it seeks sanctions requiring divestment and a fine equal to trading profits without credit for losses.
Prior case and requested sanctions
The contempt request ties back to a 2022 ruling that found Shkreli organized an anti-competitive scheme to perpetuate his company Vyera Pharmaceuticals' monopoly in Daraprim, after the price was raised from $17.50 per tablet to $750 per pill. The FTC and the states asked the judge to order Shkreli to “divest any pharmaceutical company stocks he currently owns” and “pay a fine equal to his profits from any pharmaceutical company stock trading,” plus prejudgment interest.
The filing also asks the judge to make Shkreli “face clear and escalating consequences for any future violations, including financial penalties and potential incarceration,” and it seeks sanctions that would purge current contempt and coerce future compliance. FTC Commissioner Mark Meador said a lifetime industry ban is only effective if breaches bring consequences commensurate with the seriousness of the order, while the underlying case had already resulted in a lifetime ban and a $64.6 million penalty upheld by the 2nd Circuit and left in place after the Supreme Court declined to hear his challenge.