
Martin Shkreli indictment [pdf] - rayiner
http://www.bloomberglaw.com/public/desktop/document/USA_v_Shkreli_et_al_Docket_No_115cr00637_EDNY_Dec_14_2015_Court_D/1?1450368872
======
JayHost
My first reaction to his arrest was joy and then I saw comments about him
getting "beat up in jail" to put it lightly.

People who say those kinds of things are no better than him. Possibly worse.

The solution to dealing with people like him is to be able to separate them
from society or fix the system so it can no longer be exploited so "easily".

He may have hurt a lot of people but it's been through proxy as far as we
know. Like Drone strikes, if you can't see the damage you're doing you can't
feel guilty about it.

Like Morgan on the Walking Dead. I do believe Martin is a good guy on the
wrong path.

It's easy to come together to have shared hatred for this guy and it's hard to
realize

I can do better as a human being with empathy towards someone who is broken;
sad and probably doesn't understand why people hate him.

He's just being "successful" as it was always defined to him.

Like the Boston Bomber. Getting "Revenge" does not stop the perpetual cycle
violence and misbehavior.

The Wolf of Wall Street was a glorification of this type of behavior and a lot
of people saw Jordan in that movie as a "Hero"

~~~
FLUX-YOU
>Like Morgan on the Walking Dead. I do believe Martin is a good guy on the
wrong path.

Not sure how you can defend that with this floating around.

    
    
        I’m definitely the real fucking deal. This
        is not a fucking act. I threatened that
        fucking guy and his fucking kids because
        he fucking took $3 million from me and
        he ended up paying me back. He called my
        bluff. He said, “You’re not fucking going to
        go after me.” [I said] “Yes I motherfucking
        will.” I had two guys parked outside of
        his house for six months watching his every
        fucking move. I can get down. I don’t think
        RZA knows that. I think he thinks I’m
        some powder puff white guy CEO that’s
        got too much money. No. No, no, no.
    

[http://mic.com/articles/125657/turing-ceo-martin-shkreli-
wan...](http://mic.com/articles/125657/turing-ceo-martin-shkreli-wanted-to-
make-former-colleague-and-family-homeless)

[http://hiphopdx.com/interviews/id.2825/title.martin-
shkreli-...](http://hiphopdx.com/interviews/id.2825/title.martin-shkreli-
plans-to-bail-out-bobby-shmurda)

[https://news.ycombinator.com/item?id=10750928](https://news.ycombinator.com/item?id=10750928)

~~~
Disruptive_Dave
I don't know, I take that as a nerdy white dude who desperately seeks
attention trying to impress the hip hop heads out there (that kind of talk is
extremely common in the rap game).

~~~
chipsy
I disagree with this form of dismissal as a rule.

If someone says something and then says "it was a joke", "it was a game", "I
was just making a point", that doesn't cancel out the words and their impact -
social atmosphere is not an intellectually pristine environment. You will
change the atmosphere by yelling "fire" in a crowded theater and once it's
done, there is no going back.

Likewise, if we dismiss someone's statement because "it was attention
seeking", "they didn't really mean it", "something was misunderstood", "it's
just part of the culture", that _also_ doesn't cancel it out.

There are plenty of young, impressionable folks who latch on to ideas
unthinkingly because they cannot take anything seriously at their age and
level of maturity. But that is not usually the case with a 32-year-old adult
like Shkreli, or people in hiphop culture, or people in actual street gangs.

Posturing language exists to make a claim to credibility. It serves a real
purpose and is used in an instrumental way, for the purpose of conducting
business on the terms of those who use it. The people who exploit this
language the best contain in their personality some particular combination of
motivation and lack of restraint, enabling their threats to be real to some
degree.

Shkreli already displays such a personality among multiple facets. There is no
reason to deny him the possibility of simply being a bad human being who is in
need of careful monitoring by society.

~~~
pdeuchler
>>> "You will change the atmosphere by yelling "fire" in a crowded theater and
once it's done, there is no going back."

>>> "Posturing language exists to make a claim to credibility. It serves a
real purpose and is used in an instrumental way, for the purpose of conducting
business on the terms of those who use it."

>>> "enabling their threats to be real to some degree."

>>> "There is no reason to deny him the possibility of simply being a bad
human being who is in need of careful monitoring by society."

Do you realize what you're advocating here? Also, referencing "fire in a
crowded theater" is usually looked upon as a canary for those who don't know
what they're talking about in regards to free speech

~~~
gglitch
I don't think I'm following, other than the implication that chipsy is
ignorant about free speech. For the sake of discussion, why not spell out your
concerns?

------
the_hangman
> On or about December 2, 2010, Investor 1 [...] asked SHKRELI in an email
> about, inter alia, the fund's assets under management and the names of its
> independent auditor and fund administrator. SHKRELI told Investor 1 that
> MSMB Capital had $35 million in assets under management and that the fund's
> independent auditor and administrator were Rothstein, Kass & Company, P.C.
> and NAV Consulting Inc., respectively. At the time of this representation,
> MSMB Capital did not have an independent auditor or administrator, and
> SHKRELI had lost through trading the approximately $700,000 that had been
> invested by the four Capital Limited Partners. _In fact, as of November 30,
> 2010, the value of assets in MSMB Capital 's bank and brokerage accounts
> totaled approximately $700._

~~~
amateur_soclgst
I found it funnier how they tried to short sell $1M of stock and somehow got
$7M in the hole. Must have been some leverage on that deal :v

~~~
ChuckMcM
Actually that is very "easy" to do, first you short sell some stock (naked
short) for $1M, then the stocks value goes up by $8M. You are asked to cover
your short and even after your $1M you are still left holding $7M in
liabilities.

~~~
shiv86
This is incorrect. You can’t talk about absolute $8mill gain without talking
about the total market cap (total value) of the stock. What would have
happened that the company its not increase by $8mill but increase by 8 times
the current value which is more possible to happen for small cap stocks.

~~~
lern_too_spel
If I sell something for $50 million and need to spend $58 million to cover,
I'm down $8 million. There's no need for an 8x increase in valuation.

~~~
shiv86
Yes agreed with your example. The total loss in your example is only 16%. In
the example provided above he starts with $1mill and has a loss of $7 mill.
Thats a 700% loss.

------
danso
Seriously disappointing news.

Shkreli seemed like such an obvious troll in how he defended his price gouging
by saying that a CEO's role is to maximize profit for the benefit of
shareholders...and yet did so in such an unnecessarily obnoxious way that if
he truly were the uber-capitalist, he would know that bragging and drawing
attention to what an asshole you are does _not_ achieve the true capitalist
goal. I would've bet money that in a year, he would reveal that his act was
just a trolling piece of noble performance art to raise awareness of how evil
corporations could be.

I'm holding out hope that getting arrested and indicted is still all part of
his greater plan, though if so, it's a bit more elaborate than it needs to be,
IMHO :)

~~~
skrebbel
So, if not a troll / performance artist, what is he then? Just a very stupid
person with a bloated ego? How does someone so stupid make it to CEO of a
pharmaceutical company at 32?

~~~
ivanhoe
It seems that his intelligence was undermined by the size of his ego... and
he's certainly not the first successful person to fall in that trap

~~~
samstave
He should stick to building self driving cars to spite musk.

------
elevensies
There was a lawsuit a little while back [August], Retrophin, Inc. v. Shkreli,
and reading the complaint it seems to be basically a litany of fraud, so
wouldn't be surprised if these charges had a bunch of overlap with the earlier
lawsuit -- although I haven't yet read the indictment.

[http://www.bloomberg.com/news/articles/2015-08-17/retrophin-...](http://www.bloomberg.com/news/articles/2015-08-17/retrophin-
sues-founder-shkreli-for-65-million-in-u-s-court)

PDF of complaint:
[http://www.plainsite.org/dockets/download.html?id=214847399&...](http://www.plainsite.org/dockets/download.html?id=214847399&z=82042533)
from: [http://www.plainsite.org/dockets/2mxis2kze/new-york-
southern...](http://www.plainsite.org/dockets/2mxis2kze/new-york-southern-
district-court/retrophin-inc-v-shkreli/)

Edit:

The Retrophin complaint also contains more detail about what happend with
Merril Lynch:

 _24\. Shkreli also had to contend with Merrill Lynch, which had sued him and
MSMB Capital in connection with the Orex Trade (the “Merrill Lynch
Arbitration”). Shkreli and MSMB Capital had entered into a settlement
agreement with Merrill Lynch that required Shkreli and MSMB Capital to execute
confessions of judgment in favor of Merrill Lynch. The confessions of judgment
would not be filed if Shkreli and MSMB Capital timely paid the agreedupon
settlement amount. Shkreli funded the Merrill Lynch settlement – and avoided
the filing of the confessions of judgment – by causing a $900,000 investment
in Retrophin equity securities made by MSMB Healthcare to be recharacterized
as a “loan,” causing the “loan” to be repaid with interest, and using the
“loan” proceeds together with other money taken from Retrophin to pay Merrill
Lynch. See generally ¶¶47-58, infra._

------
steveplace
I hope the investigation has been ongoing and didn't start as the result of
political pressure.

Edit: No need to hope anymore. Grand jury started in January and
investigations ongoing since 2012.

~~~
CodeWriter23
By reading the filing, the investigation is years old.

~~~
LastZactionHero
Going to guess that pissing off too many powerful people can also move you to
the front of the list.

------
danielcampos93
What I'm curious is how this affects the Wu Tang Clan's album he bought?

[http://www.nytimes.com/2015/12/10/business/media/martin-
shkr...](http://www.nytimes.com/2015/12/10/business/media/martin-shkreli-wu-
tang-clan-album.html)

~~~
blueintegral
Someone filed a FOIA with the FBI to try to get them to release it:
[https://twitter.com/wisemana/status/677510714236510209](https://twitter.com/wisemana/status/677510714236510209)

Seems like it's unlikely that you can just FOIA arbitrary data from a CD or
hard drive that's been seized during an investigation though.

~~~
rhodimus
Sadly they haven't got it:
[https://twitter.com/NewYorkFBI/status/677597263540191232](https://twitter.com/NewYorkFBI/status/677597263540191232)

~~~
fbbbbb
The request was invalid from the start and OP probably knows it.

FOIA is not used to obtain information contained _in_ the seized material, but
information that arose during the investigation. If for some reason, the
information created in the investigation contained the actual recording from
the album, then you could at least theoretically ask for that information. If
not, then there was no information to ask for in the first place.

 _What can I ask for under the FOIA?

A FOIA request can be made for any agency record. You can also specify the
format in which you wish to receive the records (for example, printed or
electronic form). The FOIA does not require agencies to create new records or
to conduct research, analyze data, or answer questions when responding to
requests._

------
kstrauser
I'm very conflicted:

1) "Innocent until proven guilty" and "wow, that timing sure is convenient".

2) LOL. _grabs a bucket of popcorn_

~~~
jackhack
I am the only one hoping the judge offers bail, then raises it 5000% over the
norm?

~~~
pc86
No sense giving the defense any more reasons for appeal. Whether the guy is a
scumbag or not, whether he has a lot of money or not, the criminal justice
system should not be imposing undue burden or punishment based on public
opinion regarding a matter that isn't even relevant to the case.

I won't lose any sleep when this guy goes to prison for a long time, but no
sense doing nonsense that will only mildly inconvenience him and give
potential grounds for appeal.

~~~
oxide
any chance he doesn't end up in prison, though?

I might be naive, but I'm under the impression that the book doesn't get
thrown at white-collar criminals in the US.

what are the odds he just ends up on probation?

~~~
pc86
I don't know any of the specifics of the case and IANAL so I couldn't say. My
lay understanding is that this is a pretty straight-forward case and he will
see the inside of a jail cell.

Personally, I think that impression (which is popular) is largely because A)
white-collar criminals can typically afford better representation than someone
e.g. accused of armed robbery; B) we're much more likely to hear about someone
who embezzled $30 million getting off with a slap on the wrist than we are to
hear about someone who broke into an empty apartment building getting a
similarly light sentence.

~~~
Kalium
Also, armed robbery is often much easier to prove than more complex securities
fraud.

------
eljimmy
I watched his stream on Twitch about a month ago and he came across as a nice
guy. Viewers were asking him for career path, post-secondary education, and
bio-tech advice. He was responding to questions politely and seemed to be
pretty chill.

From what the media reports on him and what I saw on Twitch, seems as though
he may have a bit of a Jekyll-Hyde type personality.

~~~
desuvader
Here are all his live streams. Half of them seem to be investing lessons.

All videos:
[https://www.youtube.com/channel/UC8gjB1PSXv_oAUSAQ16S0fA/vid...](https://www.youtube.com/channel/UC8gjB1PSXv_oAUSAQ16S0fA/videos)

Example investing lesson:
[https://www.youtube.com/watch?v=xeKinQ7t-xU&t=58m29s](https://www.youtube.com/watch?v=xeKinQ7t-xU&t=58m29s)

Edit: Not sure if these include videos/recordings from Twitch.

------
drawkbox
He was too loud about it and it was good to see how messed up the pricing game
is in pharma from it. It brought tons of attention to it.

They want to sweep him under the rug and make everyone believe this is fixing
something. This arrest is akin to Martha Stewart getting one of the few
indictments from insider trading after events like Enron went down.

It is a show, it is a game, he played it too loudly. He became the public fall
guy show piece in my opinion. Going after him for a multi-year SEC
investigation right when he made another big price change? Too much attention
was brought to drug pricing and controls, and they had something on him.

------
davesque
Interesting that the crime which was "serious" enough to motivate law
enforcement was theft of capital, NOT drug price gouging. It had nothing to do
with Daraprim. Of course, Mr. Shkreli's recent popularity in the headlines
_may_ have greased the wheels of this investigation a bit.

 _Update_ : As has been pointed out, this comes as no surprise since this kind
of price gouging is perfectly legal.

~~~
astrodust
As it stands, there's no law against price gouging. As morally questionable as
his pricing is, there's nothing illegal about it. "Being a dick" isn't a
criminal offense. Yet.

~~~
lloyd-christmas
Hopefully it never is. One person's dick may have another person's respect.
umm... figuratively.

------
dustingetz
Isn't Martin doing exactly what the rest of the pharma industrial complex is
doing - extracting money from insurance companies by working the healthcare
system? You can't personify the pharma industrial complex, Pfizer doesn't have
a human face or name, but Martin does, so we direct our hatred of the complex
at him. Am I wrong? Misplaced hatred does nobody any good, and none of the
social media commentary I've seen has expressed a nuanced understanding of why
singling out Martin is justified.

~~~
RIMR
Did you bother to read the indictment? If you had, you would realize that he's
not being arrested for price-gouging. That bullshit's still legal.

He's been arrested for securities fraud. He didn't get in trouble for stealing
from the sick and needy, he got in trouble for stealing from the rich and
powerful.

------
chad_strategic
I know everybody is happy to see Martin in Jail. (I'm indifferent)

It makes you feel good, you feel justice has been served.

But let me give a harsh dose of reality, if he is going to court/jail,
shouldn't most of the Wall St. bankers be in jail.

Including every bodies favorite banker John Corzine.
[http://www.newsweek.com/stalking-jon-
corzine-317733](http://www.newsweek.com/stalking-jon-corzine-317733)

So before you feel good about feeling good, let's not forget that many bankers
walk free in society and this is more of click bait story, just saying.

------
lquist
Honest question: why is this of interest to HN outside of schadenfreude?

~~~
acqq
According to Wikipedia:

"In September 2015, Shkreli received widespread criticism when Turing obtained
the manufacturing license for Daraprim, and raised its price by 5,500 percent
(from $13.50 to $750 per tablet)."

------
jqm
Cynical me has to wonder if this has less to do with stealing and more to do
with getting the plebs riled up to the point they start wanting to shine a
light on the whole ecosystem. Powerful people in government and industry
are... well, not the kind of people who take lightly to having their loot
threatened.

Note to self: if you ever take up stealing as a primary business, do it
quietly and don't attract attention to your fellows.

------
roddux
Posted earlier with a slightly easier-to-digest summary at
[https://news.ycombinator.com/item?id=10753102](https://news.ycombinator.com/item?id=10753102)

In short, he was arrested for securities fraud. This isn't related to his
price-hiking antics, rather it involves his work running pharmaceutical
companies and lying to investors.

------
livingparadox
For those who need it translated from legal, I found this article which helps
explain it a more concise way.

[http://www.reuters.com/article/us-usa-crime-shkreli-
idUSKBN0...](http://www.reuters.com/article/us-usa-crime-shkreli-
idUSKBN0U01IM20151217)

------
datashovel
While I can't argue the indictment is a bad thing, I think at best it helps
point out that, as long as you're not "too big", government is more than happy
to go after you.

------
sakopov
Am I the only one who thinks that this guy needs psychiatric attention, not
jail? Every time i saw an interview conducted with this man he seemed like a
complete psychopath.

~~~
whyenot
Prison is where many (most?) psychiatric patents get "treatment" these days.

------
CPLX
When they indict your lawyer too you know you really fucked up.

------
micwawa
When dealing with sociopaths, you have think of them like diseases and not
even begin to attempt to relate to them in human terms. Saying "I'm glad that
Skreli went to jail" should be stated with the the same joy or sense of
justice as saying "I'm glad Ebola was contained." Saying something like "I
hope Ebola learned their lesson, hahaha" shows that you don't understand
Ebola. There's a lot of wealthy sociopaths out there. I hope this story calls
attention to this and raises a bit of "sociopathic awareness"

~~~
jotux
>When dealing with sociopaths, you have think of them like diseases and not
even begin to attempt to relate to them in human terms.

I personally believe you should _never_ dehumanize people, no matter how bad
they are. Once you write off certain people as non-human it becomes much too
easy to commit atrocities.

~~~
micwawa
If you're the victim of a sociopath, it's easier to sleep at night thinking
that what happened was just some accident of nature. To accept the
alternative, that another "human being" did what they did for no other reason
than "because they could" is a recipe for a lot of suppressed internal rage.

------
ohazi
Add a [PDF] tag?

~~~
sp332
This is the PDF
[http://www.bloomberglaw.com/iframe/document/X1Q6NI1EDLO2/dow...](http://www.bloomberglaw.com/iframe/document/X1Q6NI1EDLO2/download?blaw_go=false&bulk_ordering=false&display_context=http&doc_container=content_document&imagename=1-1.pdf&rails=yes&root_url=http%3A%2F%2Fwww.bloomberglaw.com%2F&show_entries_filter=false&summary=yes&web_base_url=%2Fdocument)

------
foobarqux
Funny thing is, Shkreli has more in common with a startup founder-CEO than
with Bernie Madoff.

------
chriscappuccio
The indictment makes it obvious that this started long before Daraprim was in
the news. I'd say this isn't politically motivated, at least not for that
reason alone.

~~~
peckrob
They were investigating him but he was largely unknown outside of some
financial and biotech circles. After Daraprim and the subsequent public
outrage, not to mention his grating "bro" public persona, he became one of the
most hated men in America. They were going to nail him for _something_ as a
result of that investigation.

Remember, they got Al Capone in the 1930s for tax evasion - not all the other
things he was certainly guilty of. Several other gangsters were convicted of
things like mail fraud.

If you're guilty, or even just under investigation, don't paint a target on
your back. A smart person would know to lay low. Schkreli ... didn't.

~~~
aaronbrethorst
Charging someone for what you can prove != 'political motivation.'

~~~
peckrob
Correct, but who's to say where the investigation would have stopped if they
didn't uncover anything at first? If he wasn't so publicly reviled, it may
have been dropped if wrongdoing wasn't immediately uncovered. But because he
was so out there in public and so publicly reviled, he may have insured that
investigators kept looking at him until they _did_ find something they could
make stick.

I would note that I have no knowledge of the investigation beyond what's being
reported (and only a cursory knowledge of that). I could be totally wrong.
Maybe these charges were immediately obvious to investigators and it's just
taken them almost a year to get their ducks in a row. I'm just theorizing here
based on some historical knowledge of famous criminals and how they were
eventually brought down (see my comments above on gangsters in the 20s and
30s).

------
draw_down
Does the gleeful reaction to this bother anyone else? It's understandable in a
way, but it grosses me out.

~~~
baq
read up on sociopathy, you'll likely change your mind.

------
mahouse
The ones here being happy at this guy being indicted are the ones that defend
economic libertarianism later for the sole reason that it allows them to pay
less taxes, regardless of what's in the public interest. Disgustingly selfish.

~~~
byset
What is the basis for this comment? I'm sure that a lot of people who are
"happy at this guy being indicted" are not economic libertarians.

Also, who defends economic libertarianism "for the sole reason that it allows
them to pay less taxes, regardless of what's in the public interest"? I know
that's a favorite caricature of libertarians that's dear to those who don't
agree with libertarianism, but that doesn't mean it's true.

Not that your comment is particularly worth of discussion, but you'd think
there would better reasoning behind calling out a broad category of commenters
out as being "disgustingly selfish".

------
iamreverie
good. let the bastard rot.

