Judge rules against 'Pharma Bro' on investor losses

NEW YORK — "Pharma Bro" Martin Shkreli was responsible for nearly $10.5 million in losses in a securities fraud scheme, a judge ruled Monday, a blow to the defense that could result in a harsher sentence for the eccentric former pharmaceutical company CEO.

U.S. District Judge Kiyo Matsumoto rejected arguments by Shkreli's lawyers that investors in two failed hedge funds didn't suffer actual losses because he compensated them with drug company stock that, in the end, more than covered their initial investments.

In a written decision in federal court in Brooklyn, the judge found Shkreli should be penalized for the losses because he made risky transactions with investors' millions without their permission.

After dipping into investor money from one of the hedge funds to keep his drug company startup afloat, Shkreli "used some the funds to satisfy both personal and unrelated professional obligations," including a $900,000 debt for a bad stock market trade, she wrote.

Shkreli was convicted at trial last year, remains in jail and faces up to 20 years in prison at his sentencing on March 9.

The defense had hoped that under sentencing guidelines he would get little or even no prison time. Monday's decision on losses appears certain to work against him .

One of Shkreli's attorneys, Ben Brafman, said in a statement that he was "disappointed by the ruling but still hopeful that the court will find it in her heart to impose a reasonably lenient sentence."

At a hearing last week, prosecutors asked the judge to order Shkreli to forfeit about $7.3 million in assets, including a one-of-a-kind Wu-Tang Clan "Once Upon a Time in Shaolin" album that he has boasted he bought for $2 million, as part of the punishment. The judge hasn't ruled on that request.

Shkreli, 34, is perhaps best known for boosting the price of a life-saving drug by 5,000 percent and for trolling his critics on social media, where he became known as "Pharma Bro." His bail was revoked last year after he posted a veiled threat against Hillary Clinton.

You may also like these

Business groups appeal to China over...

Aug 12, 2016

A coalition of 46 business groups from the United States, Europe and Asia has appealed to China to...

Global stocks dip ahead of release of Fed minutes

Aug 17, 2016

Global stocks and the price of oil dipped Wednesday as investors awaited the release of the minutes...

China tightens control of online news after...

Aug 19, 2016

The Chinese government is holding chief editors of news websites personally liable for content...

IMF raises China growth forecast but warns on debt

Jan 16, 2017

The International Monetary Fund has raised its growth forecast for China but warned that rising...

China faces political conflicts in moves to cut...

Jan 25, 2017

Chinese leaders face conflicting political pressures as they begin tackling a swelling mountain of...

Financial Markets

About Us

Established in 2015, The Upstocker provides insights on financial reports, commentary, and investment data to traders so that you can make better investment decisions.

Contact us: sales[at]theupstocker.com

Subscribe Now!