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Martin Shkreli made gay investor uncomfortable with sex talk

Key Points
  • Martin Shkreli is accused of ripping off the drug company he founded to repay allegedly defrauded hedge-fund investors.
  • An investor said he asked Shkreli if he was physically attracted to him after Shkreli made a number of suggestive comments.
  • Shkreli later allegedly asked the investor to be his "wingman" when meeting women.
A Martin Shkreli hedge fund bank account had 'negative 33 cents' in it when he was claiming tens of millions in assets under management

"Pharma bro" Martin Shkreli said he might try to have sex with a male worker at his hedge fund or with a male restaurant worker, comments that made a gay investor in Shkreli's fund "uncomfortable," that investor testified Tuesday.

"He was starting to say certain things of a gay nature that worried me a bit," said Steven Richardson, a retired top American Express human resources executive who invested at the very beginning of Shkreli's MSMB Capital fund.

Richardson, 63, later served for several years as chairman of Retrophin, the drug company that Shkreli started in 2011.

Richardson said he got Shkreli to stop making "gay" comments by bringing Shkreli into Richardson's bedroom while they were having drinks at his apartment, sitting him down, and asking him if he was sexually interested in Richardson.

When Shkreli said he wasn't, Richardson testified that he replied, "Good. That's what I expected."

"I was very pleased that we had removed any doubt about whether this was a purely platonic friendship," Richardson testified.

Richardson, who lives with his longtime male domestic partner, was testifying at Shkreli's securities fraud trial in Brooklyn, New York, federal court. His testimony came two weeks after Shkreli's lawyer, Benjamin Brafman, in opening arguments said Shkreli's colleagues had questioned his sexuality behind his back.

Shkreli, 34, has pleaded not guilty to charges linked to allegations that he defrauded investors at two hedge funds he ran by misleading them about the funds' financial performance. He also denies charges that accuse him of ripping off Retrophin by looting the company of stock and cash to repay his hedge-fund investors their money.

Richardson, who is a native of England, said he invested a total of $400,000 in MSMB Capital in late 2009 and early 2010.

That investment came after he first met Shkreli, then in his mid-20s, at a cocktail party in Manhattan's East Village, and told him, "You're quite cocky and you're quite sure of yourself."

Richardson said that over time he felt that he became a "personal mentor" to Shkreli because of common features in their backgrounds, including having had to leave college before graduation, having working-class families, and having a brother with anxiety issues.

He said he encouraged Shkreli to take better care of his health after hearing he got frequent colds, and also encouraged him to make new friends because he was working so much.

"I understand that he was sleeping in a sleeping bag in his office," Richardson said.

While they were becoming closer friends, "There was one relatively sticky area," Richardson said.

Richardson said Shkreli began making comments suggesting he was open to having a homosexual encounter with people other than Richardson.

"I was gay and had a partner, and he was starting to say certain things of a gay nature that worried me a bit," Richardson said.  "I though maybe he was saying things to me because he thought I would want to hear them."

"They just felt a bit uncomfortable to me," Richardson said. "He was saying things like, 'Maybe I'll have sex with the guy in the office.' "

"It didn't feel comfortable to me," Richardson said. He added that he knew the man who worked at Shkreli's hedge fund and that man "was straight and had a girlfriend."

When he told Shkreli that, Richardson said Shkreli replied, "'Don't worry, I'll make it happen.'"

Richardson said he "felt the need to challenge" Shkreli on his comments. He invited Shkreli to his Manhattan apartment in early 2010, and while there began discussing relationships.

"He again started talking about this particular situation, about ... maybe experimenting or having sex with this guy," Richardson said.

"I said, 'Come with me' and walked him into the bedroom, and I sat him on the bed," Richardson testified.

"I said, 'You're here, you are sitting in a gay man's bedroom ... do you have any physical feeling to me?'"

"And he said, 'No, I like you a lot.'"

Richardson testified he then asked Shkreli why he was talking about having sex with other men.

"'You're saying [those things] like you're saying them because you expect me to hear them,'" Richardson testified he told Shkreli.

He then told Shkreli, "I want you to stop," according to Richardson's testimony.

When a prosecutor asked Richardson if he had any interest in a physical relationship with Shkreli, Richardson said, "No."

"I talked about having a partner from the start," Richardson noted.

Richardson said that when he spoke to Shkreli about a week after confronting him, Shkreli said, "'Yeah, maybe I understand why you did that.'"

Shkreli later began mentioning "women he liked," Richardson said.

"He started to talk about women, and said, 'You can be my wingman occasionally,'" Richardson recalled.

Richardson said he agreed to do so.

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