Following a federal investigation involving his former hedge fund and a pharmaceutical company he previously headed, Martin Shkreli, a lightning rod for growing outrage over soaring prescription drug prices, was arrested by the FBI on Thursday.
A person familiar with the matter said that the arrest was made in connection to securities fraud that happened when Shkreli was manager of hedge fund MSMB Capital Management and CEO of biopharmaceutical company Retrophin Inc. Shkreli is now the chief executive officer of Turing Pharmaceuticals and KaloBios Pharmaceuticals Inc.
Along with Evan Greebel, Shkreli is expected to be named in an indictment in federal court in Brooklyn, New York, prosecutors said. Greebel was Retrophin's outside counsel while he was a partner at law firm Katten Muchin Rosenmann.
Shkreli's was arrested from Murray Hill Tower Apartments in midtown Manhattan, reports Reuters. Shkreli, who was wearing a hoodie, was seen being escorted in to a car by law enforcement including Federal Bureau of Investigation agents.
FBI spokeswoman Kelly Langmesser confirmed the arrests of Shkreli and Greebel.
Shares of KaloBios were down 53 percent at $11.03 in the premarket. Retrophin fell 6 percent to $20.02.
Turing and KaloBios declined to comment. There were also no comments available from the lawyers for Retrophin and Shkreli.
Earlier this year there was controversy surrounding Turning, a privately held startup, after there were news reports that it had raised the price of Daraprim, a 62-year-old treatment for a dangerous parasitic infection, to $750 a tablet from $13.50 after acquiring it.
Illegally use of Retrophin assets to pay off debts after MSMB lost millions of dollars would probably be the charged that would be leveled against Shkreli, 32, sources said.
It was in January this year that a probe by federal prosecutors in Brooklyn had started based on a subpoena from prosecutors seeking information about its relationship with Shkreli.
Information on individuals or entities that had invested in funds previously managed by Shkreli were also sought in that subpoena, Retrophin said in a regulatory filing.
After founding the MSMB Capital Management in 2009 it was closed down by Shkreli in 2012. Shkreli was the CEO at Retrophin, founded in 2012, until the company fired him in September 2014.
Claiming he had used his control over Retrophin to enrich himself and pay off claims of investors in MSMB, which he had also defrauded, Retrophin had sued Shkreli in federal court in Manhattan for $65 million in August.
Shkreli has denied the allegations.
Daraprim that had long been available as a generic drug used to treat toxoplasmosis in AIDS patients was at the centre of at least two separate Congressional probes which were launched since September on the pricing issues of the drug.
A course of treatment with Daraprim went from about $1,200 to no less than $69,000, testified a doctor who treats babies with life-threatening toxoplasmosis at a Senate hearing on drug pricing last week.
(Source:www.reuters.com)
A person familiar with the matter said that the arrest was made in connection to securities fraud that happened when Shkreli was manager of hedge fund MSMB Capital Management and CEO of biopharmaceutical company Retrophin Inc. Shkreli is now the chief executive officer of Turing Pharmaceuticals and KaloBios Pharmaceuticals Inc.
Along with Evan Greebel, Shkreli is expected to be named in an indictment in federal court in Brooklyn, New York, prosecutors said. Greebel was Retrophin's outside counsel while he was a partner at law firm Katten Muchin Rosenmann.
Shkreli's was arrested from Murray Hill Tower Apartments in midtown Manhattan, reports Reuters. Shkreli, who was wearing a hoodie, was seen being escorted in to a car by law enforcement including Federal Bureau of Investigation agents.
FBI spokeswoman Kelly Langmesser confirmed the arrests of Shkreli and Greebel.
Shares of KaloBios were down 53 percent at $11.03 in the premarket. Retrophin fell 6 percent to $20.02.
Turing and KaloBios declined to comment. There were also no comments available from the lawyers for Retrophin and Shkreli.
Earlier this year there was controversy surrounding Turning, a privately held startup, after there were news reports that it had raised the price of Daraprim, a 62-year-old treatment for a dangerous parasitic infection, to $750 a tablet from $13.50 after acquiring it.
Illegally use of Retrophin assets to pay off debts after MSMB lost millions of dollars would probably be the charged that would be leveled against Shkreli, 32, sources said.
It was in January this year that a probe by federal prosecutors in Brooklyn had started based on a subpoena from prosecutors seeking information about its relationship with Shkreli.
Information on individuals or entities that had invested in funds previously managed by Shkreli were also sought in that subpoena, Retrophin said in a regulatory filing.
After founding the MSMB Capital Management in 2009 it was closed down by Shkreli in 2012. Shkreli was the CEO at Retrophin, founded in 2012, until the company fired him in September 2014.
Claiming he had used his control over Retrophin to enrich himself and pay off claims of investors in MSMB, which he had also defrauded, Retrophin had sued Shkreli in federal court in Manhattan for $65 million in August.
Shkreli has denied the allegations.
Daraprim that had long been available as a generic drug used to treat toxoplasmosis in AIDS patients was at the centre of at least two separate Congressional probes which were launched since September on the pricing issues of the drug.
A course of treatment with Daraprim went from about $1,200 to no less than $69,000, testified a doctor who treats babies with life-threatening toxoplasmosis at a Senate hearing on drug pricing last week.
(Source:www.reuters.com)
