Former Turing CEO Charged With Securities and Wire Fraud

Ex-Turing Pharmaceuticals CEO Martin Shkreli has been indicted on seven counts of securities and wire fraud for alleged conduct at several of his previous companies.

Shkreli was arrested earlier this month and faces up to 20 years in prison if convicted on all counts, according to the U.S. Attorney’s Office for the Eastern District of New York.

The indictment order contends Shkreli conspired to defraud investors in two hedge funds he ran between 2006 and 2012 that he then liquidated after draining all of their assets. Shkreli moved on to drugmaker Retrophin — which he ran between 2012 and 2014 — and is accused of using corporate money to pay off investors and debt on his failed hedge funds. All told, federal investigators believe Shkreli defrauded Retrophin of $3.4 million in cash and stock.

The U.S. Attorney’s Office for the Eastern District of New York, which is prosecuting the case, said that while the charges are “significant, they are but one example of what’s left to come as the FBI continues this investigation.”

A spokeswoman for Retrophin said Shkreli was replaced “because of serious concerns about his conduct” and that the company has instituted controls to prevent a recurrence.

The indictment makes no mention of Shkreli’s conduct after founding Turing in February, including raising the price of the antiparasitic drug Daraprim (pyrimethamine) more than 5,000 percent.

Read the indictment here: www.fdanews.com/12-17-15-Indictment.pdf.