This article covers details about the Martin Shkreli securities fraud conviction by a jury in New York.
Martin Shkreli was found guilty of securities fraud today, Friday, August 4, 2017. The 34 year-old gained notoriety for raising the price of a potentially life-saving drug by 5,000 percent. Interestingly, the three charges relate to defrauding investors in two hedge funds and in Retrophin Inc. (NASDAQ:RTRX), a pharmaceutical company he co-founded.
Testimony Leading Up to the Martin Shkreli Securities Fraud Conviction
Over a month of testimony, the members of the jury had to examine and listen to a wide variety of topics. Foremost, these included explanations of how hedge funds work along with riveting stories of Shkreli’s interactions with stakeholders. Indeed, U.S. District Judge Kiyo Matsumoto took more than two hours just to read the 90-pages of jury instructions and closing arguments took two days.
Furthermore, jurors listened to more than a dozen witnesses. Many of these witnesses were investors who said they had trouble withdrawing capital. However, some of the witnesses were employees who recounted questionable transactions. Specifically, prosecutors painted Shkreli as a scammer and habitual liar. In their allegations, they said he lied about: hedge fund performance and uses of invested capital, his education, and prior investing experience. Jurors saw what prosecutors described as sham consulting agreements Shkreli drafted as one of his many schemes to pay back investors.
Shkreli's Response to Conviction
Perhaps more interesting than the guilty verdict is how Mr. Shkreli reacted to the conviction. Outside of the courthouse, Shkreli spoke to reporters and media outlets:
Nonetheless, Shkreli faces up to 20 years in federal prison. Despite this possible 20-year sentence, expert consensus is Shkreli will face a much shorter sentencing. In addition, David Chase, a former prosecutor for the Securities and Exchange Commission, said: