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Wednesday, June 19, 2024 | Back issues
Courthouse News Service Courthouse News Service

Shkreli Keeps Quiet as Feds Expose Investment Losses

BROOKLYN (CN) - Martin Shkreli, a pharmaceutical bad boy who jacked up the prices of a life-saving HIV drug by 5,000 percent, will be shutting his mouth from now on about the federal securities case against him, his new high-profile attorney told a crush of reporters Wednesday.

Addressing reporters after a brief 10-minute hearing, attorney Benjamin Brafman said his client will no longer be talking to the media or taking to social media, as he's prone to do, about his case until it's resolved.

A throng of reporters had tailed Shkreli out of the federal courthouse to the wet streets of Brooklyn this morning for the statement.

The 32-year-old was hard to miss in white pants, a puffy jacket and trademark smirk. He stood silently beside his Brafman & Ross attorney before peeling away in a black car.

"We want to try this case in the courtroom and not in the media," Brafman said.

Wednesday's hearing before U.S. District Judge Kiyo Matsumoto comes over a month after Shkreli's arrest on charges of running a Ponzi-like scheme.

Prosecutors say Shkreli raided his former biotechnology company Retrophin to pay off investors he defrauded through a now-defunct hedge fund. The charges have nothing to do with price-gouging activities that earned Shkreli worldwide revile and will put him in the hot seat in the House of Representatives on Thursday.

In the weeks since his arrest, Shkreli fired his legal team to hire Brafman, famous for representing P. Diddy, Michael Jackson and mafiosi.

Shkreli has been notoriously unapologetic and critical of regulators in the face of scrutiny for hiking Daraprim prices from $13.50 apiece to $750 a pop after having another of his companies, Turing Pharmaceuticals, buy the rights to the cancer and HIV drug for $55 million over the summer.

Shkreli's verbal lockdown could mean that his appearance before the congressional committee tomorrow will be less than illuminating.

Brafman said his client will plead the Fifth and keep his trap shut.

During today's hearing in Brooklyn meanwhile, prosecutors revealed that one of Shkeli's investment assets plummeted from $45 million to $4 million since his arrest.

Shkreli reportedly secured his $5 million bail in December with this E*Trade account, which consisted mostly of Shkreli's majority stake in another biotech company called Kalo Bios.

The company soon filed for bankruptcy and saw its stock plummet in the last month from $23 a share to $2.05 at the close of trading Tuesday.

Assistant U.S. Attorney Winston Paes warned Shkreli at Wednesday's hearing that he could soon have to put up another asset to remain out on bail.

It's said one of the so-called "pharma bro's" major assets is the sole copy of a Wu-Tang Clan album for which Shkreli reportedly paid $2 million on the condition that it never be released.

In addition to the criminal prosecution, Shkreli faces civil complaints from Retrophin, the Securities and Exchange and investors.

Judge Matsumoto gave Shkreli more time to prepare his case after letting the defendant's former attorneys, Marcus Asner and Baruch Weiss, pull out of the case on Tuesday.

Emails the House Committee on Oversight and Government Reform made public Tuesday show Shkreli gleeful about his work to jack Daraprim prices.

"Nice work as usual," he wrote in one. "$1 bn here we come."

"Should be a very handsome investment for all of us," another says. "Let's all cross our fingers."

Shkreli is due back in court on May 3.

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