Shkreli's account grew from $138,200 to $841,000 after Cassava drug failed: FTC

Regulators allege Shkreli began $10M livestreamed challenge shorting Sellas

In a court filing Tuesday, federal regulators alleged that Martin Shkreli shorted shares of four drug companies — three of which had key drugs fail in clinical trials — and grew his Interactive Brokers account from $138,200 to $841,000 after one of those companies’ experimental Alzheimer’s drug failed in November 2024. The Federal Trade Commission and seven states asked a federal judge to hold Shkreli in contempt for allegedly violating a lifetime ban from the drug industry by trading pharmaceutical stocks publicly on YouTube and other social-media livestreams for years.

The filing, made in the Southern District of New York, names the FTC and seven states — including New York, California, Ohio and Virginia — as plaintiffs. Regulators want the court to force Shkreli to sell the drug stocks he owns, pay a fine equal to all his trading profits since February 2022 with no credit for losses, and impose escalating fines or, if he refuses to comply, jail time.

The contempt motion centers on a lifetime ban a federal judge imposed on Shkreli earlier in 2022. The order barred him from owning stakes in drug companies and from making public statements meant to influence their business, after the court found that the drugmaker he had run had illegally blocked generic competition for Daraprim.

In their filing, regulators allege that Shkreli has held shares of more than 60 drug companies since 2022 and frequently displayed his brokerage screens on livestreams streamed multiple times a week on YouTube and other social-media platforms. Recent livestreams have stretched past nine hours and include call-in portions in which viewers opine or ask Shkreli investing questions, according to the filing.

The regulators’ complaint extends to specific short positions Shkreli has discussed publicly. The filing alleges he shorted Cassava Sciences, INmune Bio, aTyr Pharma and Capricor Therapeutics — three of the four drugmakers had key drugs fail in clinical trials. After Cassava Sciences’ experimental Alzheimer’s drug failed in November 2024, Shkreli’s Interactive Brokers account grew from $138,200 to $841,000, according to the filing.

Regulators allege Shkreli is now engaged in a new trading initiative. In June, they said, he began a livestreamed trading challenge with a $10 million account. The filing alleges he is shorting Sellas Life Sciences and has told viewers its leukemia study will fail.

Shkreli did not immediately respond to requests for comment. On X, he expressed surprise that the Trump administration would take such action. “I could see totalitarian NY AG Letitia James trying to limit a citizen’s free speech but not from Trump’s FTC,” he said.

The previous day, Shkreli appeared on the “All In” podcast, which regularly hosts political figures and cabinet members and has gained influence in Silicon Valley and Washington. On the program, he criticized drugmakers for pricing drugs less than they were worth and called the pharmaceutical industry an “inefficient market.”

The contempt motion is the latest chapter in a more than decade-long legal saga. Shkreli, 43, gained notoriety in 2015 for raising the price of Daraprim to $750 a pill from less than $20 after the company he helmed had bought it. He was convicted of securities fraud in 2017 and later sentenced to seven years in prison after prosecutors accused him of defrauding investors through his hedge funds and illegally using funds from his pharmaceutical company to pay off investors. He was released early in 2022.