Shkreli was arrested this morning in midtown Manhattan for securities fraud relating to his time as a hedge fund manager of MSMB Capital Management and heading biopharmaceutical company Retrophin Inc--and not for gouging the price of a life-saving medication for pregnant women and people with AIDS because being an asshole is apaprently still legal.
In 2011, while running the hedge fund MSMB Capital Management, Mr. Shkreli started Retrophin, which adopted a controversial business strategy that has come under scrutiny. It acquired old, neglected drugs often used for rare diseases and substantially raised their prices. Retrophin, for example, raised the price of Thiola, used to treat a disease that causes kidney stones, to $30 a pill from $1.50. In 2012, he took Retrophin public through a merger with a publicly traded shell company.
The federal charges are believed to parallel a lawsuit filed against Mr. Shkreli in August by Retrophin, whose board ousted Mr. Shkreli as chief executive in September 2014. In its lawsuit, Retrophin accused Mr. Shkreli of having used the company as a kind of personal piggy bank to help pay off upset investors who lost money at the hedge fund MSMB. Among the ways he did this, the lawsuit says, was by hiring some of these investors as sham consultants to Retrophin.
Shkreli denies the allegations, but he's already been found guilty in the court of public opinion.