When an investor is looking for a place to invest his/her money, they want to choose a company that has shown significant growth, is known to be successful, and based on data, will continue to move in an upward motion. The reason investors choose to place their money elsewhere rather than having it sit in their bank account collecting dust is so they can allow it to maximize in amount. Stocks are one common market that attracts investors as it gives an investor the opportunity to double and even triple the money they originally put in. But what happens when the company an investor trusts isn’t being truthful and is running on a basis of lies and deceit?
It would appear Martin Shkreli was doing something similar to this.
Who is Martin Shkreli?
Shkreli, 34, was a former hedge fund manager before he was arrested by the FBI for federal charges and securities fraud in 2015. He was the co-founder of the hedge fund Elea Capital, MSMB Capital Management, MSMB Healthcare, and CEO and founder of the biotech company, Retrophin.
Why was Shkreli referred to as the most hated man in the America?
After days of deliberating, jurors found Shkreli guilty of three out of the eight charges filed against him.
When Shkreli took control of Retrophin, he raised the price of a drug called Daraprim from $13.5 to $750 per pill. Daraprim is used to treat some AIDS patients, which is already an expensive condition to medicate. He received constant criticism for this and was even brought before Congress to testify, however, “he invoked the Fifth Amendment” [Source: The Verge].
While Shkreli got away with raising the cost of a pill that was known to help certain individuals suffering with AIDS, many who probably weren’t able to afford it after he pulled that stunt, he was quickly brought down to a humble level when his trial came about for the federal and securities fraud charges that were brought against him just this month. CNBC highlighted that the trial ran for more than a month and took jurors five days of deliberations before a verdict was reached. Shkreli was recognized for defrauding “multiple investors in his two hedge funds out of millions of dollars” and repaid them with cash he looted, or stole, from his biotech company Retrophin.
This case involving Martin Shkreli sounds something like that of the Bernie Madoff scandal. Both were deceiving their investors to make more money and using illegitimate resources to pay back these individuals. Shkreli has been charged with two counts of securities fraud and was convicted of conspiracy to commit securities fraud in connection with Retrophin.
Securities fraud is a deceptive practice where a person or company leads an investor to make a purchase on the basis of false information. Obviously, this practice is illegal and punishable under federal law.
While Shkreli was found guilty of three of the eight charges pinned against him, he is out on $5 million bail and could be looking at spending 20 years in jail. Sentencing has yet to take place so until then, Shkreli is still living “the life” Tweeting from his Manhattan home. It is expected that his sentence won’t be nearly as severe as it sounds given his “lack of criminal record” and the support he received from his criminal defense attorney.