Biotech and Pharma

'Pharma bro' Martin Shkreli begins jury selection in federal securities fraud trial

Key Points
  • Martin Shkreli first gained infamy for a 5,000-percent drug price hike.
  • He is accused of ripping off a drug company he ran to repay defrauded investors.
  • A trial could take up to six weeks.
Jury selection underway in Martin Shkreli securities trial

Martin Shkreli, the pharmaceuticals executive who gained public infamy by unapologetically hiking the price of a drug by more than 5,000 percent, on Monday begins jury selection for his trial on charges of securities fraud.

Shkreli, 34, is charged in Brooklyn, New York, federal court with ripping off a drug company he founded, Retrophin, for millions of dollars for the purposes of repaying investors whom he allegedly also defrauded at hedge funds he ran. The trial could last for up to six weeks.

The brash, social media and hip-hop-loving Brooklyn native, who has denied the allegations, was arrested on those charges in December 2015, months after garnering widespread scorn for raising the retail price of the drug Daraprim from $13.50 per pill to $750 per pill.

Another company that Shkreli founded, Turing Pharmaceuticals, earlier that year had purchased the drug, which is used to treat a parasitic condition found in pregnant women, infants and people with HIV.

The sky-high spike resonated with a public increasingly outraged by the cost of prescription medications. Shkreli quickly threw fuel on that fire by refusing to decrease the price of Daraprim.

Shkreli also reveled in using Twitter to insult his many critics, who included then-presidential candidate Hillary Clinton. Clinton's eventual opponent, Donald Trump, also joined in the public chorus denouncing Shkreli.

None of that scorn deterred Shkreli, who later smirked while refusing to testify about Daraprim's price during an appearance before a congressional committee.

Although it wasn't widely known at the time of the price hike, Shkreli was under federal criminal investigation for his tenure as CEO of Retrophin, the company he founded and ran before Turing. The company, echoed later by prosecutors, claimed that Shkreli had used publicly traded Retrophin like a personal piggy bank to pay back people who had invested in two Shkreli-run hedge funds with a series of stock transactions and consulting agreements.

Shkreli is accused of misrepresenting the assets of those funds to investors to hide the fact the funds were money-losers.

Prospective jurors on Monday are expected to be asked if they have any negative opinions about Shkreli based on widespread media attention he has received for the past two years.

That attention has included stories about his purchase, for a whopping $2 million, of a single-copy album by the hip-hop group Wu-Tang Clan, his heckling of Clinton outside her daughter's Manhattan apartment after she fainted last Sept. 11 after a 9/11 memorial event and his banning from Twitter for harassing a female journalist.

Shkreli is being represented by a high-powered legal team headed by Benjamin Brafman, whose past clients have included Dominique Strauss-Kahn, the International Monetary Fund chief who was accused of sexually assaulting a hotel maid.

Brafman, after being hired by Shkreli, told reporters that he had told his client that he needed to stop talking to journalists. That hasn't happened. Last week, he granted an interview to The Associated Press.

Shrekli also has continued livestreaming broadcasts online from his apartment, talking about investing, drug development, chess and more mundane matters to viewers.

He also, while free on $5 million bail, has spoken at several colleges, including Princeton, where he recently agreed to pay a senior $40,000 for solving a math proof for a problem Shkreli had posed.

Brafman last week said that offer, along with other monetary prizes posted by Shkreli, had not been paid, and that Shrekli was offering such rewards in an effort to remain in the public eye.

The lawyer said that Shkreli was essentially cash broke, although he claimed his client was worth tens of millions of dollars from Shkreli's ownership stake in Turing.

Brafman last week asked Judge Kiyo Matsumoto to reduce Shkreli's bail by $3 million so that the money could be used to reduce Shkreli's substantial tax liabilities, civil legal fees, and other debts related to both his tax issues and trial preparation.

The judge has yet to rule on that request. The $3 million that Shkreli hopes to free up is in an E-Trade account being used to secure his release bail.

WATCH: Law professor: I would suspect Shkreli's counsel will not have him testify

Law professor: I would suspect Shkreli's counsel will not have him testify