From ‘Rain Man’ to ‘Pied Piper,’ Shkreli's actions confounded Retrophin executives

As the federal fraud trial of "pharma bro" Martin Shkreli closes out its third week in New York, former allies of the embattled biotech entrepreneur are painting a picture of a charming man who turned nasty upon learning he would be ousted from one of the companies he founded and once helmed, Retrophin.

It was quite a different picture than that presented by Shkreli’s defense attorney, Benjamin Brafman, who kicked off the trial by presenting Shkreli as a misunderstood genius—a “mad scientist” who slept in the office and was dubbed "Rain Man" by his colleagues.

Shkreli is facing eight fraud charges stemming from allegations that he tapped into Retrophin’s coffers to repay investors after his hedge fund racked up $10 million in losses. He was ousted as CEO in 2014. This past week, Retrophin CEO Stephen Aselage and former Chairman Steven Richardson regaled jurists with stories of an unconventional biotech CEO who attracted qualified executives by wowing them with his industry smarts, only to betray them after they removed him from his post.

RELATED: How does a lawyer defend Martin Shkreli? Bring out the mad-scientist bunny slippers

Aselage, who joined Retrophin in 2012, told prosecutors during the trial that he was attracted to the company by Shkreli’s “brilliant intellect,” according to several news reports. "I had one of my senior managers describe him as the Pied Piper—he tells a story, sings a song, and everyone just wants to follow him." Aselage admitted to being concerned that he couldn’t get straight answers from him, but he was so taken in by “visionary” Shkreli that he stayed with the company anyway.

Richardson was also a fan of Shkreli’s—a mentor to him, in fact—until he realized the havoc the CEO was wreaking on Retrophin, he testified. Shkreli was running what Richardson described as a hedge fund within Retrophin, permitting employees to use investors’ money to trade stocks. He also issued share grants to new employees and traded Retrophin’s stock during restricted periods, Richardson said, according to Bloomberg.

Richardson was one of the first people to invest in Shkreli’s hedge fund, MSMB, he told jurors, and he was one of Retrophin’s largest shareholders. But other members of Retrophin’s board were begging Shkreli to act like a responsible CEO and demanding that employees be barred from using investors’ money to trade stocks. The board also told Shkreli that he couldn’t use his favorite platform—Twitter—to release corporate information without clearing it with them first.

The last straw, Richardson said, was the discovery that Shkreli had not only maintained the employee trading operation, but that he had put in a commission structure for it. Yet when Richardson asked about that, Shkreli said there was no commission structure, according to The New York Times.

“I was stunned, absolutely stunned,” Richardson said, as quoted by the Times. “He’s lying to my face.”

In September 2014, Richardson broke the news to Shkreli that he would no longer be CEO and that Aselage would take his place.

RELATED: Why can’t Shkreli’s judge find jurors? Prospects blame ‘pharma bro’ for every drug pricing scandal

Richardson actually invited Shkreli to stay with Retrophin, but the embattled biotech entrepreneur had another plan: He left to start Turing Pharmaceuticals. That company, of course, became infamous for buying the old drug Daraprim and jacking its price up 5,000%.

As for Aselage, he testified that he was initially hired as CEO of Retrophin, but he quickly stepped down from that position after Shkreli refused to give him any decision-making power. He served on the board and as chief operating officer before returning to the CEO post after Shkreli’s ousting. He will continue to testify in the trial today.