Page 402 - The Case Lab Book

Shkreli was charged with securities fraud and conspiracy. Prosecutors say
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.

His replacement at Turing as interim CEO, Mr. Tilles had been chairman of
the company who vowed to make the drug affordable:

"We remain committed to ensuring that all patients have ready and

affordable access to Daraprim."

Shkreli had been arrested for engaging in what U.S. prosecutors said was

a Ponzi-like scheme at his former hedge fund MSMB Capital Management
and Retrophin Inc. He was released soon after on a $5 million bond. If
convicted Shkreli faces up to 20 years in prison.
The US authorities claimed that Shkreli essentially ran his company like a

Ponzi scheme where he used each subsequent company to pay off
defrauded investors from the prior company.

The SEC said Shkreli began losing money and lying to investors from the
time he began managing money. In his mid-20s, he got nine investors to
place $3 million with him and at one point he had only $331.

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