Page 84 - CL Armchair Case

Shkreli was raised in the Sheepshead Bay section of

Brooklyn by immigrant, working class parents from Albania

and Croatia. He attended Hunter College High school in

Manhattan, a secondary school for gifted students, and then

graduated from New York’s Baruch College in 2004.

At 17, he began his first internship at Cramer Berkowitz &

Co, the hedge fund founded by television personality Jim

Cramer. Shkreli got to know a small group of investors who

focused on shorting stocks. However, he was accused of

trying to manipulate FDA regulations on drug companies

whose stocks he was shorting according to Gawker (1).

“After four years at Cramer Berkowitz, he moved on to jobs

at UBS and Intrepid Capital Management before starting his

own hedge fund in 2006. Elea Capital Management, by his

own description, wasn’t terribly successful. In 2007, Lehman

Brothers sued Elea in New York state court for failing to

cover a “put option transaction” in which Shkreli bet the

wrong way on a broad market decline. When stocks rose,

Shkreli didn’t have the funds to make the bank whole. In

October 2007, Lehman won a $2.3 million default judgment

against Shkreli and Elea. The following year, however,

Lehman imploded. No one ever demanded the $2.3 million,

Shkreli says, adding, “I would make them whole now if they

wanted.”’ (2)