FTC asks judge to hold Shkreli in contempt over pharma industry ban

Shkreli’s 2022 ban followed Daraprim price hike from $17.50 to $750 per pill

The Federal Trade Commission and seven states petitioned a federal judge Tuesday to hold Martin Shkreli in contempt of court, alleging he has repeatedly violated a 2022 court order that banned him from participating in the pharmaceutical industry after his release from prison.

FTC Commissioner Mark Meador said in a statement that Shkreli “has repeatedly ignored the injunction’s clear and unambiguous prohibitions and has shown little regard for the obligations imposed on him as a result of his prior illegal conduct.” Meador added that Shkreli’s “ongoing efforts to participate in the pharmaceutical industry, despite the court-ordered ban, reflect a deliberate pattern of defiance that undermines the purpose and efficacy of the court’s remedy and the law.”

Shkreli became widely known as “Pharma Bro” after founding a pharmaceutical manufacturer and raising the price of Daraprim, an anti-parasitic drug used by HIV/AIDS patients, from $17.50 per pill to $750. The drug still costs $750 per pill.

He was later convicted of running a Ponzi scheme and defrauding investors. When he was released from prison in 2022, a court barred him from any participation in the pharmaceutical industry. He appealed the ban but lost.

The FTC and the seven states allege Shkreli has violated the order by publicly trading at least 60 pharmaceutical stocks and by “broadcasting his opinions about the business and management of many pharmaceutical industry companies.” The commission also alleges he owns millions of dollars worth of pharmaceutical company stocks.

The petition asks the judge to order Shkreli to divest any pharmaceutical company stocks he currently owns and to pay a fine equal to his profits from any pharmaceutical stock trading, plus prejudgment interest, without the ability to account for offsetting losses.

Meador said the judge should make Shkreli “face clear and escalating consequences for any future violations, including financial penalties and potential incarceration.”

The contempt request marks Shkreli’s second encounter with FTC court discipline over his post-prison pharmaceutical activities. In 2023, the FTC pursued court action against him after he founded another company, Druglike Inc.