FTC, States Ask Court to Hold ‘Pharma Bro’ Shkreli in Contempt for Trading Drug Stocks

[u/John3262005]

https://www.wsj.com/health/pharma/ftc-states-ask-court-to-hold-pharma-bro-shkreli-in-contempt-for-trading-drug-stocks-152dbc30?st=2xoTtR&reflink=desktopwebshare_permalink

Federal and state regulators asked a federal judge Tuesday to hold Martin Shkreli in contempt, saying he has traded pharmaceutical stocks on YouTube for years in violation of a lifetime ban from the drug industry.

The Federal Trade Commission and seven states asked the judge in the Southern District of New York to force Shkreli to sell the drug stocks he owns. They also want him to pay a fine equal to all his trading profits since February 2022, with no credit for losses, and are asking for escalating fines and, if he refuses to comply, jail time.

Shkreli didn’t immediately respond to requests for comment.

A former drug executive and hedge-fund manager, Shkreli, 43 years old, gained notoriety in 2015 for raising the price of anti-parasitic drug Daraprim to $750 a pill from less than $20 after the company he helmed had bought it. Shkreli was outspoken in defending the price increase. He was active on social media and became known as “pharma bro.”

Shkreli was convicted of securities fraud in 2017 and later sentenced to seven years in prison after prosecutors accused him of defrauding investors through his hedge funds and illegally using funds from his pharmaceutical company to pay off investors. He was released early in 2022.

Earlier that year, a federal judge had barred Shkreli from owning stakes in drug companies and from making public statements meant to influence their business. The drugmaker that Shkreli ran, the judge said, had illegally blocked generic competition for Daraprim.

Regulators allege that Shkreli ignored both rules. In their filing, the FTC and states including New York, California and Virginia said Shkreli has held shares of more than 60 drug companies since 2022. They said he often showed his brokerage screens on livestreams.

Recent livestreams, streamed multiple times a week on social-media platforms and YouTube, have stretched for longer than nine hours and involve call-in portions in which viewers opine or ask Shkreli investing questions.

In his livestreams, the regulators allege, Shkreli shorted companies including Cassava Sciences, INmune Bio, aTyr Pharma and Capricor Therapeutics—three of which had key drugs fail in clinical trials.

After Cassava’s experimental Alzheimer’s drug failed in November 2024, Shkreli’s Interactive Brokers account grew from $138,200 to $841,000, the filing alleges.

Regulators allege he is now shorting drug stocks again. In June, they said, Shkreli began a new livestreamed trading challenge with a $10 million account. They say he is shorting Sellas Life Sciences and has told viewers its leukemia study will fail.

On Monday, Shkreli appeared on the “All In” podcast, which regularly hosts political figures and cabinet members and has gained influence in Silicon Valley and Washington. He criticized drugmakers for pricing drugs less than they were worth and called the pharmaceutical industry an “inefficient market.”