In an announcement yesterday, the Securities and Exchange Commission has stated that they have charged Martin Shkreli with fraud for activities during his five-year period working as a hedge fund manager. Many may recognize Shkreli because of his position as former CEO of Retrophin, a pharmaceutical company. Shkreli became most known for increasing the cost of a life-saving pill from $13.50 to $750.
Now, Shkreli is accused of misappropriating money from two hedge funds that he founded. The SEC charges claim that he made material misrepresentations and illegally took assets from Retrophin Inc., a biotechnology firm he started in 2011.
The Director of the SEC’s Division of Enforcement, Andrew J. Ceresney, made this statement:
“Over a five-year period, Shkreli is alleged to have perpetrated a series of frauds on investors in his hedge funds and Retrophin’s shareholders in order to cover up his poor trading decisions. Greebel’s alleged role in facilitating Shkreli’s fraud on Retrophin’s shareholders not only crossed legal boundaries but also grossly violated both his professional and ethical obligations.”
The SEC complaint was filed in Brooklyn’s federal district court and accuses Shkreli of misappropriating roughly $120,000 from customers of the hedge fund of which he served as portfolio manager from October 2009 to March 2014, MSMP Capital Management LP. He also served in the same capacity for MSMB Healthcare LP, another hedge fund that was founded and controlled by Shkreli.
Accusations state that Shkreli used this money for clothing, food, office rent, medical expenses, and more. He also allegedly told investors and potential investors that the fund generated a 35.77% return to investor when in reality, it was reported to have generated losses of roughly 18%. He is accused of making false claims that the funds had assets reaching $35 million despite the fact that the assets in the bank were less than $1,000.
If you lost money due to misconduct from Martin Shkreli, call Meyer Wilson to schedule your free consultation. Our securities fraud lawyers will listen to the details of your case and determine if you have a claim.