FTC says ‘pharma bro’ Martin Shkreli repeatedly violated industry ban
US regulators accuse convicted felon of trading in dozens of pharmaceutical stocks and sharing opinions on social media
US regulators and seven states have asked a judge to hold “Pharma bro” Martin Shkreli in contempt for “flagrantly and repeatedly” violating a court order banning him from the pharmaceutical industry.
In court filings, they allege Shkreli has been violating prohibitions set by a 2022 court order by publicly trading in at least 60 pharmaceutical company stocks and sharing his opinions about the business and management of “many” pharmaceutical companies on social media.
Daniel Guarnera, director of the Federal Trade Commission’s Bureau of Competition, said in a statement that the move should “serve as notice” that the FTC would not hesitate to enforce violations of court orders.
“After a full trial, the court found that Martin Shkreli’s conduct drove up prescription drug costs for American patients and blocked the entry of lower-cost generics,” he said. “When judgment is entered by a court, whether it’s a settlement or an order following a trial, defendants must fulfil their obligations.”
The FTC sued Shkreli in 2020, alleging he and his company, Vyera Pharmaceuticals, engaged in an anti-competitive scheme involving the price of a life-saving drug, Daraprim, used to treat a sometimes fatal parasitic infection known as toxoplasmosis.
US District Judge Denise Cote found Shkreli liable in 2022, ruling the scheme stunted generic competition and allowed his company to increase Daraprim’s price from $17.50 per tablet to $750. The judge banned him from participating in the pharmaceutical industry for life.
New York attorney-general Letitia James said in a statement that “a court-ordered lifetime ban isn’t a suggestion”.
She joined the FTC and six other states in urging the judge to impose sanctions on Shkreli including “a complete accounting” of his pharmaceutical company stock trades, divestment of any ownership in pharmaceutical companies and fine in the amount of any profits made.
“Shkreli’s market manipulation and monopolistic tactics put investors and the public at risk, and we’re going back to court to put a stop to his latest illegal behaviour,” James said.
FTC chair Andrew Ferguson recused from the civil contempt action, meaning the commission voted 1-0 to authorise the move. The remaining FTC commissioner, Mark Meador, said in a statement that “a lifetime industry ban is only effective if breaches are met with consequences commensurate with the seriousness of the order”.
Shkreli was freed from prison in 2022, after serving nearly five years of a seven-year sentence for fraud in an unrelated case. He was convicted in 2018 for covering up heavy losses at his two hedge funds and then plundering cash from a biotech group to mask the problems.
Shkreli and his lawyer did not immediately respond to a request for comment.