FTC says Shkreli publicized trades on YouTube, X and Reddit livestreams
The Federal Trade Commission and seven state co-plaintiffs built a civil-contempt motion filed Tuesday in US district court in New York City around verbatim quotations from Martin Shkreli’s livestreamed broadcasts — including his alleged description of trading biotech stocks as his “magic trick” — to argue that the 43-year-old “Pharma Bro” has repeatedly violated a lifetime ban on participating in the pharmaceutical industry since his early release from prison in May 2022.
The FTC and its state co-plaintiffs allege in the motion that Shkreli traded stocks in at least 60 pharmaceutical companies and publicized the activity on YouTube, X and Reddit livestreams. Conditions related to Shkreli’s release from prison prohibit him from “directly or indirectly” participating in the pharmaceutical industry, including by owning stakes in pharmaceutical companies or influencing their business decisions, according to the filing.
The motion cites specific verbatim quotes from Shkreli’s broadcasts. During one livestream, the FTC alleges, he told viewers: “I’m showing you how to trade and invest in biotech.” In another broadcast, the filing says, Shkreli revealed what he described as his “magic trick,” saying: “It doesn’t matter what trades I make because I can always find a couple of biotech stocks to smoke.”
The agency also alleged that Shkreli used his livestreams to organize public campaigns to short pharmaceutical stocks based on predictions that the targeted companies’ clinical trials would fail.
For what the FTC called “brazen violations,” the agency’s filing argues that Shkreli “should be held in civil contempt and face sanctions to purge his current contempt and to coerce his future compliance.” The proposed remedies, the filing said, should include “a complete accounting of his pharmaceutical company stock trades, divestment of any ownership in any pharmaceutical company, a monetary fine in the amount of Shkreli’s profits made through his contumacious conduct, and clear and escalating consequences – including additional fines and incarceration – for any future violations.”
The lifetime ban itself stems from a separate 2022 ruling that found Shkreli had conducted an illegal anticompetitive scheme to raise the price of Daraprim — a drug used to treat malaria, certain cancers and toxoplasmosis — by more than 5,000%, from $17.50 to $750 per tablet. The same year, a US court fined Shkreli $64.6 million and described his conduct as “egregious, deliberate, repetitive, long-running and ultimately dangerous [and] illegal.”
“Defendants must fulfill their obligations” when a court issues an order, FTC competition bureau director Daniel Guarnera said Tuesday. The filing, he added, “should serve as notice that the FTC will not hesitate to enforce violations of court orders.”
New York Attorney General Letitia James said: “A court-ordered lifetime ban isn’t a suggestion. Martin Shkreli has been livestreaming his pharmaceutical company trades for the world to see, in violation of the law. Shkreli’s market manipulation and monopolistic tactics put investors and the public at risk, and we’re going back to court to put a stop to his latest illegal behavior.”
Shkreli was sentenced in 2018 to seven years in prison after being convicted of two counts of securities fraud and one count of securities-fraud conspiracy. He was released from prison early in May 2022.
The Guardian reported that it had reached out to Shkreli for comment.