January 8, 2016
By Alex Keown, BioSpace.com Breaking News Staff
NEW YORK – Martin Shkreli secured his $5 million bond following charges of securities fraud last month by using his E-Trade brokerage account valued at $45 million as security, Business Insider reported this morning.
According to reports, Shkreli is not allowed to sell or transfer any assets of the account. If the account somehow falls below $5 million, E-Trade has been ordered by the courts to immediately notify prosecutors. The action was taken by the courts to settle a lien that authorities had placed on Mr. Shkreli’s account as security for the bond, the New York Times reported. The stock assets are not allowed to be traded or sold to account for market volatility. Since his Dec. 17 arrest, Shkreli has maintained that he will prevail against the accusations and has maintained an active social media presence, hosting video chats, sharing news articles and of course maintaining his stance that the allegations brought against him are “baseless and without merit.”
The E-Trade account used as security against his bond provides a look at how much money Shkreli has personally amassed in his years as a hedge fund manager and launching pharmaceutical companies.
Shkreli was arrested by federal authorities on Dec. 17. The seven count indictment against Shkreli included multiple charges of securities fraud, securities fraud conspiracy and wire fraud conspiracy. U.S. Attorney Robert Capers accused Shkreli of running his former company Retrophin Pharmaceuticals and his former hedge fund MSMB Capital Management like a “Ponzi scheme.” The indictment said Shkreli’s scheme, which caused his investors to suffer a loss of more than $11 million, was carried out over a five-year period, from 2009 to 2014.
In August, Retrophin sued Shkreli for $65 million over his use of company funds while helming that company. In its lawsuit, Retrophin said Shkreli breached his duty of loyalty to the biopharmaceutical company and he engaged in self-dealing and also seeks disgorgement of money paid to him. Retrophin said Shkreli used company funds for personal use, enriched himself through false consulting contracts and referred to Shkreli as “the paradigm faithless servant” who “is not entitled to compensation or post-separation benefits.” Retrophin alleges Shkreli struck payoff agreement up to 10 MSMB investors who lost money when the hedge fund collapsed. Shkreli paid some investors through fake consulting agreements and others through unauthorized appropriations of stock and cash, the company alleged in its lawsuit.
The criminal case has been assigned to United States District Judge Kiyo A. Matsumoto. If convicted, Shkreli and Greebel each face a maximum sentence of 20 years’ imprisonment, according to the U.S. Attorney’s Office.
Since charges were levied, Shkreli resigned from his CEO position at Turing and was also fired from his CEO spot at KaloBios , a company he acquired majority stake in in November.
He released a statement saying the Retrophin lawsuit should have been a private civil affair. Regarding the practices of his former hedge fund, Shkreli said the deals he made involved “complex accounting matters” that federal authorities “fail to understand.”
