As we discussed in September, Martin Shkreli garnered a lot of unwanted attention when declaring that his company, Turing Pharmaceuticals AG, would be increasing the price of Daraprim approximately 4,000 percent. We noted that this negative backlash was the least of his problems, given that he was being sued in federal court for breach of fiduciary duty. The allegations in that lawsuit accused Shkreli of improperly walking away with approximately $65 million of cash in stock.
On December 17, the FBI arrested Shkreli at his Manhattan home. He is now being criminally charged with illegally taking the stock that is the subject of the fiduciary duty lawsuit. Federal prosecutors have accused him of engaging in a complicated shell game that has defrauded investors of millions of dollars.
As we predicted in September, this matter has certainly gotten more interesting. Shkreli has reneged on his promise to reduce the price of Daraprim, and he is now looking at doing time in federal prison. Needless to say, this is not the behavior that should be emulated by responsible business people.