A former hedge-fund entrepreneur and drug-company C.E.O., Shkreli came to prominence while he was running a company called Turing Pharmaceuticals. During his tenure, Turing bought a drug called Daraprim, which is used to treat rare but serious parasitic infections in AIDS patients, and Shkreli raised the price per pill from thirteen dollars and fifty cents to seven hundred and fifty dollars, sparking public condemnation and outrage. He capitalized on the attention to cement his reputation as an aggressive and obnoxious user of social media, ultimately getting himself banned from Twitter for harassing a female journalist. Vilified in the press, which took to calling him Pharma Bro, Shkreli came to symbolize extreme corporate greed.
When Shkreli was arrested, in late 2015, it was—somewhat incredibly—for reasons unrelated to the Daraprim price hike. The government charged him with defrauding investors in MSMB Capital Management, his former hedge fund, and with stealing stock from shareholders of Retrophin, a publicly traded drug company that he ran; the government alleged that he used those shares to repay his hedge-fund investors. In other words, Shkreli’s case does not represent a takedown of systemic fraud and corruption in the financial system; his were the schemes of an eccentric solo operator who is potentially a danger to others in the market, but who has little significance to the broader financial system.
One of the questions at the heart of the case, at least according to the defense attorney Benjamin Brafman, was whether Shkreli possessed the criminal mind-set to render him guilty of fraud, regardless of whether he actually committed fraudulent acts. Was it possible, Brafman repeatedly asked, for someone to be guilty of a crime when he didn’t intend to commit one?
The prosecutor who presented the government’s closing argument, Alixandra Smith, was serious, measured, the one who studied harder than anyone else for the test; she walked the jurors through a meticulous review of all the evidence the government had amassed, a process that lasted almost four hours. Brafman was the opposite: during his closing argument, the diminutive celebrity defense attorney paced in front of the jury and tried an emotional appeal. “This trial has been a difficult voyage for all of us, and it was a difficult voyage because it was a difficult case,” Brafman said. He added, “Good faith can in this case be a complete defense, in each charge. Martin Shkreli was a visionary.”
Brafman as much as admitted that Shkreli had done many of the things that the government alleged: lying to investors about how large the fund was, who was auditing it, and how much money it was returning each month. When the hedge fund blew up and lost most of its assets, Brafman said, Shkreli practically ran himself into the ground to return all his investors’ money—by, yes, giving them shares of a totally unrelated drug company he was building, Retrophin, that weren’t his to give. Brafman pointed out that all of the wronged investors whom the government put on the stand to testify had ultimately made money, not lost it, in spite of Shkreli’s improper behavior.
During his time on Wall Street, Shkreli became known as a savvy and strange character, one with a talent for pharmacology and self-destructive behavior. In the end, the “brilliant,” “Rain Man”–like Shkreli had done his best, Brafman argued—and wasn’t that all you could ask for? “You don’t have him on a beach. You don’t have him on a yacht. You have him sleeping in a sleeping bag so he could build this company,” Brafman said. “Maybe he screwed up, and maybe he made mistakes . . . but Martin Shkreli was always truthful to the mission.”
“We’re not presenting a defense of insanity, but every single witness told you they don’t see Martin as normal,” he went on.
“You know what I feel like right now?” Brafman said. “I feel like a lifeguard, a lifeguard on a beach, not at a swimming pool. I see Martin floating in his own little world. And I’m experienced. I can save him in two minutes, except for a current, a riptide. And that moves him—the current takes him. That’s what I’m afraid of: not the facts, not the law, not the testimony, but that Martin Shkreli be swept out in the current that surrounds Martin Shkreli everywhere he goes.”
Throughout the five-week trial, Shkreli defused some of the tension by live-streaming himself and his apartment for hours on Facebook. His chances of acquittal seemed to rise as the days of deliberations ticked on. When the jurors sent out a question on Tuesday, asking the judge to clarify the term “fraudulent intent,” it sent a hopeful signal to Shkreli’s defense team. In the end, though, the defense strategy didn’t fully work. Shkreli was found guilty of charges that carry maximum prison terms of twenty years. He will have to return to court at some point to learn his sentence.
“Mr. Shkreli, I wish you well,” the judge said after the verdict was read. “I’ll see you soon.”
Author: Sheelah Kolhatkar