The News: Martin Shkreli is on trial accused of 8 counts of securities/wire fraud Click To Tweet
In opening statements Wednesday, Benjamin Brafman, Mr. Shkreli’s lawyer, portrayed his client as an eccentric who was not fit for corporate life, The New York Times reports. A key witness to the prosecution is Sarah Hassan, who met at a Manhattan restaurant with a man she had been told was a “rising star in the hedge-fund world”: Martin Shkreli.
Ms. Hassan had about $1 million herself, and directed a multimillion dollar fund, DynaGrow Capital, created by her family, says the Times. A colleague of her father’s had told her that Mr. Shkreli was on the upswing, and his investing returns had made the colleague “ecstatic.”
Ms. Hassan invested $300,000 with Mr. Shkreli’s fund, wanting “to learn from him,” she testified on Thursday. Yet Ms. Hassan’s testimony suggested that Mr. Shkreli was at ease courting power players in the pharmaceutical sector.
She is the daughter of Fred Hassan, a partner at Warburg Pincus and the former chairman of Bausch & Lomb and CEO of Schering-Plough. Brent Saunders, who introduced Ms. Hassan and Mr. Shkreli, was CEO of Bausch & Lomb and is now the chief executive of the pharmaceutical giant Allergan PLC. Warburg Pincus declined to comment. Allergan did not respond to a request for comment, says the Times.
About a month after Ms. Hassan invested, Mr. Shkreli emailed her to say that her investment had increased to $324,600. He then approached her about a business he was starting called Retrophin, to sell so-called orphan drugs to treat rare conditions.
His pitch, she said, was “you can make a lot of money on orphan drugs, because the price per patient is quite high.”
Ms. Hassan testified that Mr. Shkreli told her that Mr. Saunders and other wealthy people were backing Retrophin, and Ms. Hassan invested another $150,000 of DynaGrow’s $20 million into the company. But Mr. Shkreli kept associating her father’s name with Retrophin, when her father had nothing to do with it, she testified.
Mr. Shkreli had asked Ms. Hassan to arrange a meeting with her father, whom Mr. Shkreli’s lawyer, Mr. Brafman, described during cross-examination as “a legend in the pharmaceutical industry.” Ms. Hassan did so; nothing came of it.
Yet in an email sent in March 2012, Mr. Shkreli copied Mr. Hassan and some of his friends. “I didn’t know why he would be on the email,” Ms. Hassan testified. She then saw that her $150,000 investment, through DynaGrow, included Fred Hassan in the listing. She said she told Mr. Shkreli that her father was not an investor, and not to refer to him as such.
In January 2013, she emailed Mr. Shkreli again. “I continue to see comments being made that my father is ‘an investor’ or ‘an adviser’ to you,” she wrote. “I trust you will not drop my father’s name in any of your dealings.”
That year, she said, she received a tax document that listed “Sarah Dynagrow and Fred Hassan” as partners, and alerted Mr. Shkreli. “It didn’t even make sense; there was no entity” called that, she said. “Sarah, I’m so embarrassed–I don’t know how this happened, certainly not due to me,” Mr. Shkreli wrote back.
I had an inkling a media circus was in the offing when it took an abnormally long time to dismiss nearly 250 potential jurors who stood prepared to convict Martin Shkreli of simple avarice and larceny, let alone securities fraud. Nonetheless, a jury was finally impaneled and the fraud trial of the Twitter hobgoblin and part-time biotech capitalist got started last Tuesday (june 27, 2017).
Right off the bat, the defense and the prosecution took turns presenting two totally different individuals.
For defense attorney Benjamin Brafman, Shkreli is the misunderstood “genius” who ultimately helped fatten the bank accounts of the wealthy investors who abused his trust and made fun of his sexuality, says John Carroll at Endpoints. But prosecutors portrayed Shkreli as a chronic liar who repeatedly and illegally misused money from investors and Retrophin, the biotech he launched and lost.
“The evidence will prove that the defendant broke the law repeatedly,” said assistant US attorney G. Karthik Srinivasan, according to USA Today. “He did this by convincing (investors) he was a Wall Street genius. In reality, he was just a con man.”
Carroll reminds us that Shkreli became a household name among us healthcare news purveyors after a riot broke out on social media following a report from The New York Times that the defendant had started a new company–Turing–which acquired an old generic drug and immediately jacked up the price more than 5000%.
Overnight the prep-schoolish looking Shkreli became the poster child of the quintessential profit-hungry pharma company, epitomizing everything repugnant about the industry that it’s trying mightily to shake.
But what’s really alluring about “Pharma Bro” Shkreli is that the evidence against him suggests he is simply a liar who ripped off his clients, a prosecutor told jurors. His lawyer countered, saying former fund manager may be nuts, but he’s also a genius who made millions for his investors.
Shkreli convinced investors “he was a Wall Street genius, but in reality he was just a con man,” US Attorney Srinivasan said at the start of the trial. “Lies upon lies upon lies. This is what this defendant, Martin Shkreli, did for years.”
Shkreli’s lawyer urged the jury to keep an open mind despite his client’s infamy. “Is he strange? Yes,” Brafman told the jury. “Will you find him weird? Yes.”
Shkreli is known across social media for broadcasting much of his life online. In the weeks leading up to his trial, he spent hours on YouTube live-streaming himself petting his cat, combing his hair and playing chess. He has amassed more than 80,000 followers on Facebook and been barred from Twitter for harassing a female journalist.
Shkreli appeared confident just before opening arguments were delivered, telling a friend in the courtroom, “The next three hours will be some of the most interesting I’ve ever seen.”
Shkreli appeared elated as Brafman, standing at the defense table next to him, cited a series of names that his client had been called over the years, including “Rain Man” and “odd duck.”
“As Lady Gaga said, ‘He was born this way,’ and it has nothing to do with this trial,” Brafman told jurors.
Then wrapping up his opening statements, Attorney Brafman, promised the jury a good show in the weeks ahead.
When I started gearing up for the trial of Martin Shkreli, I thought there would be a fair amount of media coverage. Mr. Shkreli is a magnet for eyeballs, social media and stories about him, whether or not fake. All of which is just fine with me.
But I wasn’t prepared for the smothering tonnage of video and print coverage I encountered last week.Steve's Take: I had an inkling the Martin Shkreli trial would be a circus Click To Tweet
After all, this is just another trial of a person charged with securities fraud. Happens all the time. But why the avalanche of coverage? That’s what I’m really baffled at. Shkreli’s certainly no Bernie Madoff, no Cosby. They I can understand. But who is this guy, really?
And then I got it. It’s the fact that he’s essentially a nobody who ran into a public feeding frenzy for a college-educated, Caucasian with a permanent smirk and narcissistic bearing, reminiscent of a recently unknown but now famous son-in-law of someone who calls the White House “home.”
People love to despise Shkreli types; can’t get enough of them whether on social media, television or in print. That’s exactly what they crave; so does this defendant. Everyone wins.
Me? However this drama plays out, I definitely have better things to do with my time. Like write this piece. Oops!