In the well-publicized trial of Martin Shkreli, the daughter of a pharmaceuticals executive has testified that she felt “betrayed” by the “Pharma Bro” after having difficulties getting her money back from her supposedly lucrative hedge fund investment.
Shkreli eventually told her the money had been used to fund his new drug company without her permission.
Shkreli Company Investor Speaks Out
Shkreli is the former CEO who became infamous in 2015 for hiking the price of niche drug Daraprim by more than 5,000 percent, becoming the poster child for greed in the pharmaceutical business. The drug’s price rose from $13.50 to $750 per tablet.
The personality is now being tried on charges of securities fraud.
“To be frank, I felt somewhat betrayed at this point,” said 27-year-old Sarah Hassan in a Brooklyn court trial, referring to her realization that there was no money left in Shkreli’s hedge fund MSMB Capital after he decided to close it.
According to Hassan, she was told that she could get her cash from the fund. Shkreli allegedly told investors that he could pay out of all their investments in cash, in stock of his first drug firm Retrophin or a combination of both, as CNBC reported.
Nearly a year later, Hassan eventually received her principal investment as well as Retrophin stock that led to a steep profit.
In a cross-examination of Hassan, Shkreli lawyer Benjamin Brafman emphasized that she got way more than her original investment back in light of Retrophin being a successful company. When asked if she “made a hefty profit,” the investor replied: “Yes, even more than I asked for.”
Hassan testified that when she made her investment, she was told she could pull her money out of the fund on a month’s notice. But only after nearly a year of being informed of MSMB’s wind-down did she eventually manage to receive $400,000 in cash from Retrophin, not Shkreli, and over 58,000 shares of the company’s stock. This came after agreeing to sign a settlement agreement and a commitment to not sue over the situation.
Hassan, who first invested $300,000 with the hedge fund after meeting him via her father’s colleague, is the daughter Fred Hassan. Fred sat as CEO and chairperson of Schering-Plough before it merged with Merck back in 2009 and now acts as managing director at private equities investment company Warburg Pincus.
34-Year-Old 'Pharma Bro' On Trial
Shkreli’s securities fraud trial got under way Wednesday, June 28, after delays from difficulties in finding impartial jurors.
The former CEO stands accused of lying to his investors and implementing a Ponzi-like scheme across different firm, and he could spend 20 years in prison if convicted of the charges unrelated to the dug price hike he is so known for.
He is charged with stealing $11 million in stock from Retrophin to pay off investors who lost money in two of his hedge funds.
Shkreli later built Turing Pharmaceuticals, where he earned the title “most hated man in America” after the astronomical price hike on Daraprim. He resigned from the company after his December 2015 indictment.
He is known for his self-publicizing behavior and lifestyle, including smirking through a congressional hearing early last year and releasing controversial tweets that led to his Twitter account suspension in January.
He defended himself in public at different times, including through the launch of the website “Pharma Skeletons” that details and comments on cases of big pharma firms making staggering price hikes.
