Pharma Wundakid Martin Shkreli Arrested On Fraud Charges

Turing Pharmaceuticals CEO Martin Shkreli, who earlier hiked the price of a critical drug 5,000 percent, was arrested on fraud charges on Thursday.

The Washington Post reports that Shkreli was arrested for frauds committed during his time at Retrophin, a pharma company and at MSMM Capital, a hedge fund management firm, both of which he founded. The US attorney for the Eastern District of New York has charged the 32-year-old of defrauding investors by lying to them about profit and running the businesses as a Ponzi scheme.

According to The New York Times, the allegations against Shkreli include lying to investors at MSMB Capital that the fund returning profit when it was in losses. He also reportedly told investors in an email that the firm had $ 35 million assets when it had less than $ 1,000 in its accounts. Retrophin, the pharma company, initiated a lawsuit against him earlier this year alleging that Shkreli sought to pay off disgruntled MSMB investors through its pockets and also hired some of them as consultants for Retrophin. MSMB investors were paid $ 7.6 million through Retrophin, a publicly traded company.

The federal indictment against him accuses Shkreli of withdrawing funds from Retrophin for his personal debts, unrelated to the company, which eventually led to his ouster last year. Earlier this year, Shkreli received intense criticism for hiking the price of a critical drug Daraprim from $ 13.50 to $ 750 after acquiring rights to it. He was arrested at his Manhattan home.