Martin Shkreli is back in the Federal Trade Commission’s spotlight, this time for allegedly violating his lifetime ban from the pharmaceutical industry.
In a brief filed Oct. 13, the FTC and attorneys general from seven states asked a federal judge to hold Shkreli in contempt. The plaintiffs allege that “pharma bro” Shkreli has “flagrantly and repeatedly” violated the court-ordered industrywide ban since his release from prison in 2022.
“Today’s action should serve as notice that the FTC will not hesitate to enforce violations of court orders," Daniel Guarnera, director of the FTC’s Bureau of Competition, said in an official statement on the motion.
Shkreli initially achieved pharmaceutical infamy in 2015 when he was CEO of Turing Pharmaceuticals, later renamed Vyera Pharmaceuticals. As CEO, he hiked the price of the lifesaving antiparasitic drug Daraprim by more than 4,000% to $750 per tablet, sparking national outrage.
In 2017, a federal jury found Shkreli guilty of two counts of securities fraud and one count of conspiracy. He was ordered to forfeit $7.4 million to the U.S. government and sentenced to seven years in prison, of which he served more than four. He attempted an even earlier release in 2020, claiming he was needed to work on a COVID-19 vaccine, but a federal judge denied the request.
Also in 2020, the FTC brought its own case against Shkreli. In 2022, a U.S. district judge found him liable for orchestrating an anticompetitive scheme that blocked generic competition to keep Daraprim prices high. The judge ordered Shkreli to surrender more than $64 million in profits and banned him from any further participation in the pharmaceutical industry.
The FTC and its state co-plaintiffs allege that Shkreli has violated that ban by publicly trading pharmaceutical stocks in at least 60 different companies and broadcasting his opinions on the businesses of multiple drugmakers via platforms such as YouTube, Reddit and X.
According to the motion, Shkreli’s own YouTube channel provides evidence that he has been trading in prohibited stocks since he left prison in 2022. He initiated multiple trading challenges in which he publicly bought and sold specific pharma stocks, even sharing his "magic trick" with viewers: "It doesn't matter what trades I make because I can always find a couple of biotech stocks to smoke,” he said in a livestream. Shkreli also allegedly used his online following to drive public campaigns to short certain pharma stocks, including that of biotech Cassava Sciences.
The FTC asserted that this activity was a direct breach of the court’s 2022 injunction, which bans Shkreli “for life from directly or indirectly participating in any manner in the pharmaceutical industry,” including “[a]cquiring or holding an Ownership Interest in a Pharmaceutical Company” or “[t]aking any action to directly or indirectly influence or control the management or business of any Pharmaceutical Company,” according to the brief.
And there’s likely plenty more where these trades came from, according to the FTC. In his livestreams, Shkreli alluded to the fact that he does most of his trading offline, even saying “I have some other accounts that I’[d] show you, but, like, I know feds are watching, so f[\*]ck that.”
The FTC and attorneys general are calling for sanctions to “purge [Shkreli’s] contempt and coerce future compliance.” Specifically, they want Shkreli to divest any pharmaceutical stocks he owns, surrender profits from prohibited trades and face escalating penalties, including potential incarceration, for future violations.