Background and career
Martin Shkreli (; born March 17, 1983) is an American investor and businessman. Shkreli is the co-founder of the hedge funds Elea Capital, MSMB Capital Management, and MSMB Healthcare, the co-founder and former CEO of pharmaceutical firms Retrophin and Turing Pharmaceuticals, and the former CEO of start-up software company Gödel Systems, which he founded in August 2016. In September 2015, Shkreli was widely criticized when Turing obtained the manufacturing license for the antiparasitic drug Daraprim and raised its price to insurance companies from $13.50 to $750.00 (USD) per pill, sparking a scandal in the United States and around the world, cementing his reputation as 'the most hated man in America'. In 2017, Shkreli was convicted in federal court on two counts of securities fraud and one count of conspiracy. He was sentenced to seven years in prison and up to $7.4 million in fines. In the civil antitrust case, Shkreli was fined a further $64.6 million to be repaid to victims. In May 2022, he was released early from the low-security federal prison in Allenwood, Pennsylvania. He is permanently banned from serving as an officer of any publicly traded company.
Shkreli was born in Coney Island Hospital in the New York City borough of Brooklyn on March 17, 1983. His parents were Roman Catholic, and he said his religion has been "a guiding post" for him, although he does not believe in God. His parents emigrated to the United States from Albania and worked as janitors. His two sisters and his brother grew up in a working-class community in Sheepshead Bay, Brooklyn. Shkreli was raised Catholic and attended Sunday school as a child. Shkreli attended Hunter College High School. Sources differ on whether Shkreli graduated from Hunter or whether he was expelled before his senior year and received the credits necessary for his high school diploma through City-As-School High School. He ended up in a program that placed him in an internship at Wall Street hedge fund Cramer, Berkowitz and Company when he was 17. Shkreli received a bachelor's degree in business administration from Baruch College in 2004. Shkreli told Vanity Fair that he developed an interest in chemistry when a family member suffered from treatment-resistant depression.
During Shkreli's time at Cramer, Berkowitz and Company, he recommended short-selling the stock of Regeneron Pharmaceuticals, a biotech company testing a weight-loss drug. When its price dropped in accordance with Shkreli's prediction, Cramer's hedge fund profited. Shkreli's prediction drew the attention of the Securities and Exchange Commission, which investigated Shkreli's knowledge about the stock but was unable to prove wrongdoing on his part.
After four years as an associate at Cramer Berkowitz, Shkreli worked as a financial analyst for Intrepid Capital Management and UBS Wealth Management. He then started his first hedge fund, Elea Capital Management, in 2006. In 2007, Lehman Brothers sued Elea in New York state court for failing to cover a 'put option transaction' in which Shkreli bet the wrong way on a broad market decline. When stocks rose, Shkreli did not have the money to cover his losses. In October 2007, Lehman Brothers won a $2.3 million default judgment against Shkreli and Elea, but Lehman collapsed before it could collect on the ruling. In September 2009, Shkreli and a childhood friend Marek Biestek started MSMB Capital Management, which took its name from the initials of the two. Shkreli and Biestek shorted biotech companies, then described flaws in the companies on stock trading chat rooms. On February 1, 2011, in a naked short sale on an account it held with Merrill Lynch, MSMB Capital sold short 32 million shares of Orexigen Therapeutics stock at about $2.50 per share the day after its price plunged from $9.09, when the Food and Drug Administration (FDA) declined to approve the drug naltrexone/bupropion (Contrave). The stock price rebounded; MSMB could not cover the position, although it had told Merrill Lynch that it could. Merrill Lynch lost $7 million on the trade and MSMB Capital was virtually wiped out. Retrophin's 2015 SEC Complaint contended Shkreli had created MSMB Healthcare and Retrophin "so that he could continue trading after MSMB Capital became insolvent and to create an asset that he might be able to use to placate his MSMB Capital investors." In 2011, Shkreli filed requests with the FDA to reject a new cancer diagnostic device from Navidea Biopharmaceuticals and an inhalable insulin therapy from MannKind Corporation while publicly short-selling both companies' stocks, the values of which dropped after Shkreli's interventions. The companies had difficulty launching the products as a result, although the FDA ultimately approved both. In 2011, MSMB made an unsolicited cash bid for AMAG Pharmaceuticals at a price of $378 million. Matthew Herper of Forbes wrote that the attempted hostile takeover was "done for the specific purpose of firing the company's management and stopping a proposed merger with Allos Therapeutics. When the merger plans stopped, so did Shkreli."
Shkreli founded Retrophin (a portmanteau of "Recombinant dystrophin") in 2011 under the MSMB umbrella and ran it as a portfolio company with an emphasis on biotechnology, to create treatments for rare diseases. In December 2012, Shkreli was chosen for the Forbes 30 Under 30. The publication regretted it eleven years later, placing Shkreli in its "Hall of Shame", a list of ten notably bad picks. Retrophin's board decided to replace Shkreli in September 2014, and he resigned from the company the following month. He was replaced by Stephen Aselage. During Shkreli's tenure as CEO, the company's employees used alias Twitter accounts to make gangster rap jokes and encourage short selling of other biotech stocks. After Shkreli's departure, Retrophin filed a US$65 million lawsuit against him in August 2015, claiming that he had breached his duty of loyalty to the biopharmaceutical company in a long-running dispute over his use of company funds and "committed stock-trading irregularities and other violations of securities rules." The lawsuit alleged that Shkreli had threatened and harassed a former MSMB employee and his family. Shkreli and some of his business associates have been under criminal investigation by the U.S. Attorney for the Eastern District of New York since January 2015. Shkreli invoked his Fifth Amendment right against self-incrimination in order to avoid testifying during civil depositions. Shkreli's name is on two patents held by Retrophin for drugs to treat PKAN. In November 2020, Eric Dube, Retrophin's new chief executive, announced the company would be rebranded as Travere Therapeutics Inc. in an effort to further distance the company from Shkreli, and said the company is no longer working on treatments for the disease from which the company takes its name.
In July 2017, at Shkreli's criminal trial, Aselage, who was hired by Shkreli in October 2012, and replaced him at Retrophin in 2014, testified "He's a brilliant intellect, visionary" but also someone who was called a "Pied Piper" and whom Aselege "worried about not always getting 'straight answers' from".
