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. They are asking a judge in US district court in New York City to hold him in contempt.
In a motion filed on Tuesday, the FTC and its co-plaintiffs allege that 43-year-old Shkreli has traded stocks in at least 60 pharmaceutical companies and publicly commented on their businesses since his release from prison in May 2022. Conditions of his release prohibit him from directly or indirectly participating in the pharmaceutical industry, including owning stakes or influencing business decisions.
The FTC alleges Shkreli publicised these activities through livestreams and posts on YouTube, X, and Reddit. During one livestream, he reportedly told viewers: “I’m showing you how to trade and invest in biotech.” He also allegedly used livestreams to organise public campaigns to short pharmaceutical stocks based on predictions of clinical trial failures.
The court filing states that for these “brazen violations,” Shkreli “should be held in civil contempt and face sanctions to purge his current contempt and to coerce his future compliance.” These sanctions could include a complete accounting of his stock trades, divestment of ownership in pharmaceutical companies, a monetary fine based on profits from his alleged conduct, and escalating consequences for future violations, including additional fines and incarceration.
Shkreli’s pharmaceutical industry ban originated from a 2022 ruling that found he had conducted an illegal anticompetitive scheme to raise the price of Daraprim by over 5,000%. In 2018, Shkreli was sentenced to seven years in prison after being found guilty of two counts of securities fraud and one count of securities fraud conspiracy.