This story has been updated.
NEW YORK — Martin Shkreli got his first taste of Wall Street as an intern for a hedge fund firm started by CNBC personality Jim Cramer. After striking out on his own, he developed a reputation for aggressive tactics, including betting a company’s stock price would fall and then berating its executives on social media.
His battles earned him a spot on Forbes’ list of “30 under 30” after Shkreli torpedoed a health-care industry merger and “antagonized” pharmaceutical giant Pfizer into removing its former chief executive from the company’s board of directors, the magazine said. Shkreli, now 34, is a “boy genius,” his attorney has said.
But one of Shkreli’s most aggressive moves changed that narrative when, as chief executive of Turing Pharmaceuticals, he raised the price of Daraprim — a 62-year-old drug primarily used to treat newborns and HIV patients — from $13.50 to $750 a pill. When critics pounced, the live-out-loud Shkreli did not do his reputation any favors by calling a journalist a “moron,” quoting defiant rap lyrics on Twitter and defending the price increase as a “great business decision.”
“Our shareholders expect us to make as much money as possible,” Shkreli said during a health-industry summit in 2015, dressed nonchalantly in a hooded sweatshirt and sneakers. “That’s the ugly, dirty truth.”
These two images of the Brooklyn native are playing out in federal court this week as Shkreli faces eight charges that could land him in prison for years.
Packed into the second-floor courtroom in Brooklyn, several potential jurors said they had already formed strong opinions of Shkreli. One potential juror told U.S. District Judge Kiyo Matsumoto that Shkreli is “the price gouger of drugs. My kids are on some of these drugs.”
Another said, “I know he’s the most hated man in America,” while another asserted that “from everything I’ve read, I believe the defendant is the face of corporate greed in America.” All were excused from the jury.
Shkreli sat a few feet away by himself, intermittently appearing to write on a yellow pad or staring up at the ceiling. Dressed in a gray suit and no tie, he yawned and leaned his head against his arm. In the back row of the courtroom sat his father. During one break, Shkreli greeted friends in the courtroom and warned them to stay away from “fake news.”
The trial is slated to last from four to six weeks, and Matsumoto told potential jurors that it “promises to be interesting and educational.” So far, more than 250 potential jurors have been interviewed, but not a single one had been seated. On Wednesday, the judge and lawyers were interviewing candidates again in hopes of finding 12 jurors and six alternates. If they find enough, opening statements would likely start either late Wednesday or early Thursday.
With news trucks stationed outside and more than a dozen reporters flowing in and out of the courtroom, Shkreli is facing intense media scrutiny. Citing negative news coverage of his client — which included the New York Post front-page headline “Jury of His Jeers, 134 jurors out in ‘Pharma Bro’ trial: They all hate him” — Shkreli’s attorney requested a mistrial, which was denied. He also asked that reporters not be allowed to listen to potential jurors’ voice their opinions about Shkreli, which was also denied.
Court officers confiscated a copy of one of the New York tabloids that covered the first day of the trial from one of the potential jurors. “I think it’s impossible for jurors not to see them. I have someone who is facing 20 years in prison,” said his attorney Benjamin Brafman.
Federal prosecutors alleged that for five years Shkreli lied to investors in two hedge funds and biopharmaceutical company Retrophin, all of which he founded. After losing money on stock bets he made through one hedge fund, Shkreli allegedly started another and used his new investors’ money to pay off those who had lost money on the first fund. Then, as pressure was building, Shkreli started Retrophin, which was publicly traded, and used cash and stock from that company to settle with other disgruntled investors, prosecutors contend.
But potential jurors appear to be struggling to separate Shkreli’s public persona with the charges he is facing. One juror told the judge that she had been in the health-care field for half her life and knew someone who used the AIDS medication whose price skyrocketed under Shkreli. “I have cried with them,” she said. “I don’t think I could be the right person to sit” on the jury. Even after advised by Matsumoto that Shkreli is not facing charges related to raising drug prices, the potential juror said she couldn’t be impartial and was excused.
Shkreli’s attorneys are preparing to argue that he was following the advice of his lawyer, who is also facing criminal charges. His investors didn’t lose money and were not defrauded, they have argued.
“Shkreli did not defraud the investors and then make it up to them later with a different investment. This may be the Government’s view, but it’s not ours,” Brafman said in a court filing earlier this month. “At trial, the defendant will show that Mr. Shkreli never, at any time, intended for a single investor to lose a dime. Not in the short term; not in the long term; not ever.”
Shkreli’s emergence on the national stage coincided with a larger debate about rising drug prices, and Shkreli appeared to relish the attention, or at least not shrink from it. Even after he was arrested in December 2015, he spent hours on YouTube chronicling his life for fans and was eventually kicked off Twitter for harassing a freelance journalist. When he appeared before a congressional committee last year, he smirked and grinned while refusing to answer questions. Afterward on Twitter, he called the lawmakers “imbeciles.”
Shkreli’s attorney urged him to stay quiet, but the former hedge fund manager repeatedly took to social media. In April, he offered $40,000 to a Princeton University student who solved a mathematical proof. In May, he pledged on Facebook to pay $100,000 for tips leading to the arrest of the person who killed former Democratic National Committee employee Seth Rich.
Shkreli is “traveling to the beat of his own very unique drummer,” Brafman has said.
When Shkreli asked this month for his $5 million bail to be reduced to $2 million, his loquaciousness worked against him. Brafman told the court that Shkreli didn’t have any cash and needed to pay taxes and legal fees. But skeptical prosecutors noted that Shkreli had bragged about his wealth, including flaunting that he had paid millions for a Picasso painting, a one-of-a-kind Wu-Tang Clan album, and a World War II-era Enigma code-breaking machine used against Nazi Germany.
Those statements should not be taken seriously, his attorney responded. “Tweeting has become, unfortunately, so fashionable, and when people tweet, they don’t always mean what they say,” Brafman said.
The judge denied the request.
Many of the potential jurors interviewed Wednesday appeared well aware of Shkreli’s activities.
“He is probably guilty and there is no way I can let him slide,” one said, adding that he didn’t like that Shkreli had been disrespectful to the Wu Tang Clan.
Shkreli purchased the only known copy of a Wu Tang Clan album for $2 million and didn’t release parts of the album until after President Donald Trump was elected. He later lashed out at the hip-hop group for distancing itself from him. “If I hand you $2 million . . . show me some respect. At least have the decency to say nothing or ‘no comment,’ ” he said on Twitter.