Page 26 - Martin Shkreli Case Study

Shkreli was charged with securities fraud and conspiracy. Prosecutors
said from 2009 to 2014, Shkreli lost some of his hedge fund investors'
money through bad trades, then looted a pharmaceutical company
where he was CEO for $11 million to pay back his disgruntled clients.
Four years from 2011, before being arrested Shkreli and his hedge fund
were suspected of faking a takeover bid for a then-publicly traded
health-care company, SeraCare — suspicions that were made known to
federal authorities in 2012. He apparently repeatedly misrepresented
his fund's performance and the size of its assets under management in
an attempt to make it appear the fund was much bigger than it actually
was.
In the SeraCare matter, Shkreli made an offer in June 2011 to buy the
company for $4.25 a share. "We strongly believe that the Board of
Directors should find our offer to be fair and in the best interests of the
Company's stockholders," Shkreli said in a letter sent to SeraCare's
board.

At the time Shkreli claimed he wanted to buy SeraCare, his hedge fund
was actually suffering steep losses.

In New York, in mid December, 2015 Shkreli said if he could have done
it over (Daraprim),

“I probably would have raised the price higher,” adding,
“My investors expect me to maximize profits.”

However, Shkreli like a few other health-care firms - ones that acquire
the rights to drugs and significantly increase their prices - was drawing
the scrutiny of regulators and prosecutors, with a possible daunting
effect on aggressive drug-pricing strategies.