Martin Shkreli faces FTC contempt request in drug case

Martin Shkreli, former CEO of Turing Pharmaceuticals AG, center, pauses as he speaks with members of the media with his attorney Benjamin Brafman (right) outside federal court in the borough of Brooklyn, United States, Friday, August 4. 2017

Peter Foley | Bloomberg | Getty Images

The Federal Trade Commission on Friday demanded that notorious “pharmaceutical brother” Martin Shkreli be tried for founding a new pharmaceutical company in defiance of the judge’s ban on the convicted fraudster from working in the pharmaceutical industry.

Shkreli, who was released from prison last year, was “banned directly or indirectly for life” in February.
involvement in any way in the pharmaceutical industry” as a result of the FTC’s antitrust lawsuit against him and a previous pharmaceutical company he founded.

That order followed Manhattan Federal Court Judge Denise Cote’s January 2022 decision that Shkreli oversaw an illegal scheme to maintain a monopoly on the life-saving drug Daraprim, which continued even as he was being sued for his conviction in an independent case of securities fraud in prison.

In its Friday court filing, the FTC noted that Shkreli had announced in July the formation of a new company called Druglike “which appears to be engaged in the pharmaceutical industry.”

The filing cited Druglike’s press release accompanying the announcement, which described the company as “a Web3 drug discovery software platform co-founded by Martin Shkreli.”

The FTC said the formation of the company, as well as Shkreli’s failure to pay his nearly $25 million share of a $64.6 million judgment he is owed in the lawsuit, indicate that he violated the orders of the court in this case.

The FTC and a group of states that have sued Shkreli said in the filing that he failed to comply with their requests to give them documents and submit to an interview as part of their investigation into whether his involvement in Druglike violated the order the Cote fails to ban him from the country industry.

The FTC said Shkreli was required by Cote’s order to provide the agency with that information.

“Martin Shkreli’s failure to comply with the court’s order demonstrates a clear disregard for the law,” Holly Vedova, director of the FTC’s competition bureau, said in a statement.

“The FTC will not hesitate to use the full extent of its agencies to facilitate a full investigation of possible wrongdoing,” Vedova said.

Benjamin Brafman, an attorney for Shkreli, declined to comment on the FTC application.

Shkreli gained widespread infamy in mid-2015 when his pharmaceutical company, now known as Vyera Pharmaceuticals, uncompromisingly increased the price of Daraprim, an antiparasitic drug used to treat pregnant women, babies and people living with HIV, by more than 4,000% to $17.50 per pill to $750.

In December 2015, federal prosecutors in Brooklyn, New York, criminally charged Shkreli with misleading investors in two hedge funds he previously ran and manipulating the stock of another company he founded, Retrophin, which is now known Travere Therapeutics.

Shkreli was convicted on multiple counts in that case in mid-2017. His $5 million post-trial bail was revoked weeks later after a judge offered his Facebook followers a $5,000 cash bounty if they provided him with hair samples of former Democratic presidential nominee Hillary Clinton .

Shkreli was sentenced to seven years in prison in 2018. He was released into a federal temporary shelter in May last year.

Shkreli was driven back to New York from his Pennsylvania prison by a friend, Edmund Sullivan, who had previously served on the board of Retrophin.

Sullivan is mentioned in court documents in Shkreli’s criminal case as one of seven people who, on Shkreli’s direction, received thousands of shares in a shell company that were used by Retrophin as a vehicle for its IPO. Sullivan was not charged with wrongdoing in the case.

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