Image Source: House Committee on Oversight and Government Reform, Public Domain, via Wikimedia Commons
What Was the Accusation?
Former pharmaceutical executive and hedge fund manager Martin Shkreli became a nationally controversial figure in 2015 after Turing Pharmaceuticals acquired Daraprim, a decades-old drug used to treat the parasitic infection toxoplasmosis, and raised its price from $13.50 to $750 per tablet. The increase drew widespread criticism from physicians, patient advocates, lawmakers and the public and helped make Shkreli, who was frequently described in the media by the derisive nickname “Pharma Bro,” a symbol of aggressive pharmaceutical pricing. That controversy, however, was separate from the federal criminal case that eventually resulted in his imprisonment.
Federal prosecutors charged Shkreli with securities fraud and related offenses arising from his management of the hedge funds MSMB Capital Management and MSMB Healthcare and his involvement with the publicly traded biopharmaceutical company Retrophin. According to federal prosecutors, Shkreli made false representations and omissions to investors, distributed fabricated performance information after investment losses and participated in schemes involving Retrophin stock and company assets. In August 2017, after a six-week trial in federal court in Brooklyn, a jury convicted him on two counts of securities fraud and one count of conspiracy to commit securities fraud while acquitting him on five other counts.
The Daraprim controversy remained an important part of Shkreli’s public reputation, but U.S. District Judge Kiyo A. Matsumoto made clear at sentencing that the drug-pricing controversy was not the conduct for which he was being sentenced. The criminal case instead concerned the fraud schemes involving his hedge funds and Retrophin. Shkreli had also been jailed before sentencing after the court revoked his bail in September 2017 because of an online post offering money for a strand of former Secretary of State Hillary Clinton’s hair.
On March 9, 2018, Shkreli appeared before Judge Matsumoto for sentencing. His demeanor contrasted sharply with the combative and provocative public persona he had displayed during earlier stages of his legal and pharmaceutical controversies. Shkreli cried while addressing the court, accepted responsibility for his situation, characterized his actions as disgraceful and shameful and apologized to the investors whose trust he had lost. He rejected the idea that his prosecution resulted from a government conspiracy and instead said that his own conduct had caused his downfall. Contemporary reports described the statement as an emotional plea for leniency and an unusually explicit acknowledgment of personal responsibility.
Judge Matsumoto sentenced Shkreli to seven years in federal prison, followed by three years of supervised release. The court also imposed a $75,000 fine and ordered $7.3 million in forfeiture. Assets available to satisfy the forfeiture judgment included $5 million that had secured his bail, the one-of-a-kind Wu-Tang Clan album Once Upon a Time in Shaolin, an unreleased Lil Wayne album and a Picasso painting. The Justice Department said the sentence resulted from Shkreli’s convictions for securities fraud and securities-fraud conspiracy.
Key Apologia Strategies:
Mortification, Corrective Action, Differentiation
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Transcript
Excerpts from Martin Shkreli’s sentencing statement (March 9, 2018):
“The one person to blame for me being here today is me. Not the government. There is no conspiracy to take down Martin Shkreli.”
” I took down Martin Shkreli with my disgraceful and shameful actions.”
” ‘This is my fault. I am no victim here.”
“Do not feel bad for me.”
“I am terribly sorry I lost your trust … You deserve far better.”
Letter to the Judge (February 26, 2018):
“I feel I should try to explain my personality.
“I am an irreverent and free-wheeling individual, who has never been shy about speaking my mind. I am an individual who prizes equal rights, scholastic achievement and individuality. Please understand that when I get into a public war of words with someone, my comments do not always reflect my true nature. Sadly, when I get dragged into a mud fight, I often dive in, head first.”
