Biotech and Pharma

Judge rejects defense bid for mistrial in Martin Shkreli fraud case after lawyer blasts negative press coverage

Key Points
  • Martin Shkreli gained notoriety for a 5,000 percent drug price hike.
  • He is accused of ripping off a drug company he ran to repay defrauded investors.
  • Several potential jurors were excused for bias after telling the court they think he's a "snake," a "price gouger," "the face of corporate greed."
Potential jurors don't hold back in the Martin Shkreli trial
Potential jurors don't hold back in the Martin Shkreli trial

A federal judge on Tuesday rejected Martin Shkreli's mistrial request that was made because of news stories about the scathing opinions some prospective jurors have of the disgraced former pharma CEO.

Judge Kiyo Matsumoto also knocked down the defense's request that a pool press reporter not be allowed to listen in on sidebar interviews with prospective jurors, which is where those people have been voicing their blunt views on the notorious Shkreli.

Those views had led to a screaming front page of the New York Post saying "Jury of His Jeers: 134 jurors out in 'Pharma Bro' trial: They all hate him."

Several potential jurors were excused on Monday for comments about the 34-year-old Shkreli. One called him "a very evil man," others said he was "a snake," the "face of corporate greed" or "the price gouger of drugs."

Shkreli's lawyer, Benjamin Brafman, said he feared that such headlines and stories would have been read by and tainted the opinions of prospective jurors who could end up deciding the fate of the pharmaceuticals executive.

"I think it's impossible for jurors not to see them," Brafman said. "I have someone who is facing 20 years in prison."

Shkreli, who has pleaded not guilty, is accused of ripping off his former drug company Retrophin for millions of dollars to repay allegedly defrauded investors at his hedge funds.

The charges are unrelated to Shkreli's other drug company, Turing Pharmaceuticals, which raised the price of the antiparasite drug Daraprim from $13.50 to $750 per pill in 2015.

Jury selection resumed Tuesday after Matsumoto rejected the mistrial motion. A pool reporter was allowed to listen in on sidebars. Shkreli himself did not listen in on the sidebar questioning of jurors.

A group of 69 potential jurors has been assembled by midday Tuesday, after more than 200 people were screened over the course of two days for conflicts related to their personal situation or opinions of Shkreli.

"He just seems to care about himself," said one male potential juror about Shkreli. "What I've heard is how he increased the price of drugs." That man was among the people excused from the panel.

One woman, who was kept as a potential juror, told Matsumoto she had never read anything about the case, and did not know who Shkreli was.

"Oh, very good," Matsumoto said.

The morning session began with a closed-door hearing with prosecutors and defense lawyers. At the hearing, Brafman later indicated, he had raised his request for a mistrial, which would have allowed the trial to start afresh with a new pool of jurors in several weeks.

Martin Shkreli arrives to federal court in Brooklyn on June 27th, 2017.
Justin Solomon | CNBC

After a group of reporters contacted their own lawyers, the Brooklyn courtroom was open to the media.

When Brafman began talking to Matsumoto publicly about the negative comments about his client, Shkreli smirked broadly at reporters in the gallery. Sitting behind those journalists was Shkreli's father.

Brafman criticized the Post's headline for being inaccurate. He said only a fraction of those dismissed on Monday had voiced criticisms of Shkreli. Most, he said, were excused because of scheduling conflicts, family and work commitments and medical issues.

Brafman said he feared that some potential jurors would feel they were being portrayed as idiots because they did not have negative views about Shkreli.

Katherine Bolger, a lawyer representing a group of media outlets, argued via telephone against barring the pool reporter from listening to jurors being questioned out of the earshot of the gallery. Those sidebars happen if potential jurors say they have a conflict of some sort that would make it difficult for them to serve.

Bolger said the media coverage accurately reflected the fact that a number of people have negative opinions of Shkreli, which he himself helped to create by his conduct. That includes having raised the price of a drug used by some pregnant women, infants and people with HIV by more than 5,000 percent.

While free on $5 million bail, Shkreli has repeatedly made controversial comments on social media and elsewhere.

"He created these opinions himself," Bolger said.

Barring a pool reporter, the lawyer said, "Will not stop people from having bad views of Mr. Shkreli."

And, Bolger added, "Frankly, the fact that you can't find a sympathetic jury for the guy, apparently, is something the public has a right to know."

Brafman argued strenuously against Bolger's push for continued press access to the sidebars, but did concede one point.

"Mr. Shkreli, God bless him, has created part of the problem," Brafman said.

That view was underscored by comments made by a woman who was questioned later in the day as a potential juror.

The woman told Matsumoto that "I have lot of friends who are LGBT," or lesbian, gay, bisexual or transgender. One of those friends, the woman said, takes Daraprim, the medication whose price was increased sharply by Shkreli in 2015.

"I've cried with them," the woman said of her friend. I don't think I would be the right person to sit [on the jury]." She was excused as a juror.

David Kelly, the former United States Attorney for the Southern District of New York, the federal prosecutor's office that covers Manhattan and several other downstate counties, said the pace of jury selection "isn't unusual in a case like this."

"It's going to be tough to get jurors to serve and to find an impartial jury but they will," Kelly told CNBC. "I've been on cases that have taken an hour to find a jury and cases that have taken a week."

Kelly called Brafman's request for a mistral "a smart move."

"He has to make that motion. It sets up for an appeal," Kelly said, referring to the possibility that Shkreli is found guilty, and will seek to reverse that conviction on one or more grounds.

Monday's proceedings, a day before the mistrial request, went slowly because of the time it took jurors to be screened for conflicts or bias.

The judge plans to seat 12 jurors with six alternates.

Shkreli is being tried ahead of co-defendant Evan Greebel, who was a business lawyer for Retrophin. Greebel, who likewise has pleaded not guilty, is expected to go on trial later this year.

While maintaining Greebel's innocence, the co-defendant's lawyers earlier this year called Shkreli a serial liar who is "guilty" of fraud.

'Pharma Bro' defies advice to keep quiet  before fraud trial
'Pharma Bro' defies advice to keep quiet before fraud trial

—CNBC's Jim Forkin contributed to this report.