Former drug company executive Martin Shkreli and his lead attorney Benjamin Brafman arrive at U.S. District Court for the fourth day of jury deliberations in his securities fraud trial in the Brooklyn borough of New York City, U.S., August 3, 2017.
Amr Alfiky | Reuters
The Federal Trade Commission and seven states asked a federal judge on Tuesday to hold notorious “Pharma bro” Martin Shkreli in contempt, alleging he “flagrantly and repeatedly violated” a 2022 civil court order that had banned him for life from the pharmaceutical industry.
The FTC and the states say Shkreli, since being released from prison in May 2022, violated that court order by publicly trading in at least 60 pharmaceutical industry stocks and “broadcasting his opinions about the business and management of many pharmaceutical industry companies,” according to a press release.
The contempt filing asks a judge to order Shkreli to “divest any pharmaceutical company stocks he currently owns” and “pay a fine equal to his profits from any pharmaceutical company stock trading (plus prejudgment interest) without the ability to account for offsetting losses.”
The filing also asks that a judge make Shkreli “face clear and escalating consequences for any future violations, including financial penalties and potential incarceration.”
FTC Commissioner Mark Meador said in a statement, “A lifetime industry ban is only effective if breaches are met with consequences commensurate with the seriousness of the order.”
The court order stems from a finding that Shkreli organized an anti-competitive scheme to perpetuate his company’s monopoly in the anti-parasitic drug Daraprim. Shkreli had hiked the price of Daraprim from $17.50 per tablet to a whopping $750 per pill.
In addition to banning him from the drug industry for life, a judge ordered Shkreli to disgorge more than $64 million.
The civil case that led to the order is unrelated to the criminal case that ended with Shkreli’s conviction in 2017 on securities fraud charges related to hedge funds he once operated and another drug company he founded. Shkreli was sentenced to seven years in federal prison in 2018, and was released in 2022 with credit for time locked up before he was sentenced and other factors.
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“After a full trial, the court found that Martin Shkreli’s conduct drove up prescription drug costs for American patients and blocked the entry of lower-cost generics,”Daniel Guarnera, director of the FTC’s Bureau of Competition, said in a statement on Tuesday.
“When judgment is entered by a court, whether it’s a settlement or an order following a trial, defendants must fulfill their obligations,” Guarnera said. “Today’s action should serve as notice that the FTC will not hesitate to enforce violations of court orders.”