Today's sentencing of Martin Shkreli was, as one would expect, a bit of a circus.
First, in a lengthy speech by Shkreli's lawyer, Martin Brafman told a federal judge that he sometimes wanted to punch his client in the face, but he told U.S. District Judge Kiyo Matsumoto that Shkreli’s outspokenness should not be held against him during Shkreli's sentencing.
"I’ve got my begging voice on,” Brafman told the judge.
He had previously argued for a lenient sentence in court filings partly on the grounds that his investors eventually made money after Shkreli paid them in stock and cash from Retrophin. On the other end, prosecutors had previously argued that Shkreli should not get any credit for what they described as stealing from Retrophin to pay off the investors and have said he did not show any genuine remorse. The Judged sided with the prosecution, earlier this week ordering Shkreli to forfeit $7.4 million in ill-gotten gains.
Then it was Shkreli's turn to talk.
The "Pharma Bro", in his last appeal to the judge ahead of his sentence, told the court that he understands his mistakes and begged forgiveness from the investors he lied to. As Bloomberg adds, a remorseful Shkreli told the court he was embarrassed and ashamed, saying he got innocent people mixed up in his conduct. “This is my fault,” he said. Addressing his investors, he choked back tears to say, “I am terribly sorry I lost your trust. You deserved far better.”
“There is no conspiracy to take down Martin Shkreli,” he said. “I took down Martin Shkreli, with my shameful and disgraceful actions.”
Shkreli, 34, said he made “gross, stupid and negligent mistakes,” and that while he disagrees with the picture the prosecution painted of him, “I am not going to be baited into going into the mud.”
He was convicted last August of lying to investors in his hedge funds and manipulating shares in the biotech company he founded. Prosecutors sought a sentence of at least 15
years for the securities fraud. Shkreli, who once proclaimed “you can’t quell the Shkrel,” asked for as little as a year.
In the end, the judge split the baby, and on Friday afternoon announced Shkreli's sentence: 7 years (or 84) months in prison with credit for time served, "capping a saga that alternately captivated and enraged Washington, Wall Street and the tabloids" as Bloomberg summarized one of the most closely watch legal cases in recent years.
“This case is not about Mr. Shkreli’s self-cultivated public persona,” Judge Matsumoto said Friday before handing down the sentence. His actions were “extremely serious,” she said, recounting how he boasted once of threatening an investor and his family.
With the sentence coming at roughly half of what the prosecution had sought, we can only assume that Shkreli will be happy, relatively speaking, although we doubt the trademark smirk will be there...
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Shkreli’s downfall marks an ignominious end to what was once a promising career at the intersection of finance and pharma, Bloomberg recaps his career. The child of working-class immigrants from Albania and Croatia, Shkreli landed his first job as a 17-year-old college intern for Jim Cramer, the hedge fund manager and host of CNBC’s “Mad Money.” He was soon recommending that investors short biotech shares, becoming so good at it that he found himself under the scrutiny of the Securities and Exchange Commission at 19. The agency found nothing amiss.
He opened his first hedge fund at 23, then launched Retrophin five years later. In 2015, Shkreli infamously hiked — by 5,000 percent — the price of Daraprim, a life-saving drug for people with compromised immune systems. He has repeatedly maintained that his primary concern was company profit and investor returns. But detractors accused him of making the drug unaffordable to patients, many of them with HIV, while at the same time gouging insurance companies.
Less than a year later, the U.S. indicted him, accusing Shkreli of running his funds like Ponzi schemes. The evidence showed that Shkreli lied to investors over six years, by hiding the collapse of one fund and the near failure of a second, and by claiming to manage more than $125 million, when the real figure was closer to $1.1 million. He was also convicted of a separate scheme to secretly control Retrophin shares, but cleared of stealing company assets.
The judge previously ordered Shkreli to surrender $7.4 million in profits he made from his crimes. She also said any of his assets — including a Picasso, $5 million in a personal trading account, a one-of-a-kind Wu-Tang Clan album and shares in a drug company he once ran — could be used to meet the forfeiture if he doesn’t have enough available cash.