Shkreli is charged with looting the drug company, Retrophin, of stock and cash to pay investors in his hedge funds, whom he also allegedly defrauded.
Pierotti had worked as a portfolio manager for one of Shkreli's hedge funds, MSMB Consumer, from 2011 through 2012.
In late 2012, Pierotti said, he was one of more than a half-dozen friends and associates of Shkreli who were offered the chance to buy 400,000 shares in a shell company. That company, Desert Gateway, was used as a vehicle for a reverse merger with Retrophin, the drug company that Shkreli founded, so that Retrophin's shares could become publicly traded.
Prosecutors claim that Shkreli and his lawyer and co-defendant, Evan Greebel, tried to secretly control, and in some cases did control the 2.4 million Desert Gateway shares that were sold to Shkreli's friends and associates as part of the two men's alleged securities fraud conspiracy.
Pierotti told jurors that he agreed to pay $400 for the shares in Desert Gateway from Troy Fearnow, a relative of that company's owner, Michael Fearnow. But Pierotti said that he only ended up receiving 350,000 shares in Desert Gateway, and was told that Shkreli was "holding back" the other 50,000 shares.
Pierotti testified that he never was an employee of Desert Gateway, or of Retrophin.
Shkreli at one point asked Pierotti to sell some of the shares that he had bought to Darren Blanton, a Texas-based investor, according to Pierotti, who declined the request.
Blanton has testified two weeks ago that he had to pester Shkreli for almost three years to get his $1.3 million investment in Shkreli's hedge fund redeemed.
Blanton said he only got $200,000 in cash, and the rest came in the form of stock in Retrophin.
During his testimony, Pierotti suggested, without going into detail, that his relationship with Shkreli turned sour in December 2012.
He said that when Shkreli emailed him and asked to meet with him in New Jersey, where Pierotti lived, Pierotti declined and told Shkreli he could communicate through a mutual friend.
Shkreli didn't take the brush off well.
In a subsequent email, Shkreli wrote Pierotti and said he would like to buy the Retrophin stock he held "for what you paid for it."
And in a later phone call, there was "a lot of screaming and yelling from Martin" demanding that Pierotti sell him the stock, Pierotti testified.
Then came the letter to Pierotti's wife, in which Shkreli, in addition to making scathing comments about Pierotti, offered to pay $40,000 for the Retrophin shares.
Pierotti said that Shkreli claimed that Pierotti had agreed to work for Retrophin as part of the offer to buy the Desert Gateway shares. He also claimed that Pierotti committed "classic" fraud by taking the shares and not doing the work, according to an email.