Martin Shkreli is undisputably weird, but he’s not a criminal. That’s the essence of his defense attorney’s opening arguments in Shkreli’s securities-fraud trial, which opened Wednesday.
Prosecutors, of course, have their own ideas; they say the notorious drug price-hiker looted cash and shares from his drug company Retrophin to cover losses at his hedge fund. That’s why they’ve brought him up on eight different fraud charges.
But after three days of jury selection showed just how the public feels about Shkreli—“a snake,” by one prospective juror’s account; “the face of corporate greed” by another—attorney Benjamin Brafman went full-bore into misunderstood genius territory to defend his client.
Shkreli wore bunny slippers and a stethoscope around the office. He slept there in a sleeping bag. His colleagues called him names, Brafman said, citing one that fit his strange-but-brilliant narrative: Rain Man.
Brafman himself threw a few choice adjectives Shkreli’s way, referring to him as a “nerd,” an “odd duck” and—again with the narrative—“mad scientist.”
“Is he strange? Yes. Will you find him weird? Yes,” Brafman said, as quoted by numerous media. But investors “used his genius and made millions ... despite his flaws and dysfunctional personality, Martin Shkreli is brilliant beyond words.”
As the man whose enormous drug-price increase set controversy ablaze, Shkreli is anathema in the pharma industry, which has been fighting that fire ever since. Whether his trial fans the flames further remains to be seen. But drugmakers no doubt are taking note of the undercurrent of hostility that surfaced as potential jurors were interviewed early this week. One of them, according to CNN, cited "real moral problems with the pharma industry."
Brafman’s more substantive argument Wednesday was that Shkreli’s hedge fund investors were high rollers who knew the risks of putting their money into his funds, Elea Capital, MSMB Capital and MSMB Healthcare. They themselves would say they’re not victims, Brafman said: “No one in this case was defrauded.”
But prosecutors have their own narrative. Girish Karthik Srinivasan recited the charges against Shkreli in court, painting him as a liar and cheat who made off with $11 million in investors’ money between 2009 and 2014. Shkreli faces eight counts, including securities fraud and mail fraud.
Pretending to be an investing mastermind, Shrkeli told “lies on top of lies on top of lies” to build up his funds, Srinivasan said. “[I]n reality, he was just a con man.”
Shkreli allegedly lost more than $10 million of his hedge fund investors’ money and turned to Retrophin’s coffers to repay it. “Rather than owning up to his lies and admitting his investments were a failure, the defendant doubled down by engaging in an even bigger fraud,” Srinivasan said Wednesday.
The events for which Shkeli is called to account preceded his drug-pricing infamy, though he did use a buy-and-hike strategy when CEO of Retrophin; there, he jacked up the price of rare disease med Thiola to $30 per pill, up from just $1.50. Retrophin’s board had tossed Shkreli out by the time he hit the public spotlight as CEO of Turing Pharmaceuticals, with his 5,000% increase on the price of toxoplasmosis med Daraprim.
Still, the Daraprim controversy has loomed large in the Brooklyn courtroom where Shkreli’s trial is taking place. Brafman called it the “elephant in the room,” and by all accounts, it made jury selection uncommonly difficult. Some 250 prospects were questioned before 12 jurors could be seated.
“The only thing I would be impartial about is which prison he goes to," one prospective juror said, according to press pool reports. "Looking at him just kind of twists my stomach," said another.
Still another? "I don't really understand why someone would take a medication that people need and jack up the price. I'm sorry, your Honor: Is he just stupid or crazy?"
Shkreli pleaded not guilty, of course, and if convicted, faces up to 20 years in prison. He also faces a related lawsuit filed by Retrophin. The trial is expected to last up to six weeks, the Financial Times says. "Buckle up your seat belts, ladies and gentlemen,” Brafman said Wednesday, as quoted by CNBC. “You’re in for a good ride."