The Federal Trade Commission (FTC) and seven US states have alleged that pharmaceutical executive Martin Shkreli repeatedly violated a lifetime ban on participating in the pharmaceutical industry, and they are asking a judge to hold him in contempt.
In a motion filed on Tuesday in US district court in New York City, the FTC and its state co-plaintiffs allege that 43-year-old Shkreli – nicknamed the “Pharma Bro” – has traded stocks in at least 60 pharmaceutical companies and publicly commented on their businesses since his release from prison in May 2022.
Conditions related to Shkreli’s release prohibit him from directly or indirectly participating in the pharmaceutical industry, including owning stakes in pharmaceutical companies or influencing their business decisions.
The FTC alleges that Shkreli publicized his activities through live streams and posts on the YouTube, X and Reddit platforms. During one live stream, he told viewers: “I’m showing you how to trade and invest in biotech,” according to the FTC.
In another live stream, Shkreli allegedly 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 FTC also alleges Shkreli used his live streams to organize public campaigns to short pharmaceutical stocks based on predictions that companies’ clinical trials would fail.
For those “brazen violations”, the FTC’s court filing said: “Shkreli should be held in civil contempt and face sanctions to purge his current contempt and to coerce his future compliance.”
The court filing said that should include, but not be limited to, “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”.
Shkreli’s pharmaceutical industry ban stems from a 2022 ruling that found he 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.
That same year, a US court fined Shkreli $64.6m, describing his conduct as “egregious, deliberate, repetitive, long-running and ultimately dangerous [and] illegal”.
“Defendants must fulfill their obligations” when a court issues an order, the FTC competition bureau director, Daniel Guarnera, said on Tuesday. He added that Tuesday’s filing against Shkreli “should serve as notice that the FTC will not hesitate to enforce violations of court orders”.
Similarly, the New York attorney general, Letitia James, said of Shkreli: “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.”
The Guardian has approached Shkreli for comment.
Shkreli in 2018 was sentenced to seven years in prison after being found guilty of two counts of securities fraud and one count of securities fraud conspiracy. He became a symbol of corporate greed before being released from prison early.
