A stock trader at one of "pharma bro" Martin Shkreli's hedge funds testified Tuesday he did not see Shkreli "buying and selling stock" or doing other things hedge fund operators normally do.
"I didn't see him doing a whole lot," said the trader, Timothy Pierotti, at Shkreli's securities fraud trial in Brooklyn, New York, federal court.
"Normally at a hedge fund, you would see people managing their position, managing their risk, talking to brokers, buying and selling stock," said Pierotti, who had sat directly across from Shkreli's desk while working for him.
Alixandra Smith, a prosecutor, then asked, "And you did not see the defendant do any of these things?"
"No," replied Pierotti, 46, whose tenure working for Shkreli spanned from late summer of 2011 into late 2012.
Pierotti's testimony bolsters claims by prosecutors that Shkreli's funds, MSMB Capital and MSMB Healthcare, were operating with relatively little money with which to trade, despite Shkreli's boasts to investors of having up to $100 million under management. Pierotti said Shkreli talked about having $80 million or $100 million under management.
Pierotti is expected to testify later Tuesday about allegedly being threatened by Shkreli in 2013 after Pierotti refused to return 350,000 shares he had bought for just $400 in a shell company that did a reverse merger with a drug company, Retrophin, that Shkreli had founded.
Shkreli, 34, has pleaded not guilty to charges of looting Retrophin of stock and cash to repay investors he also is accused of defrauding at his hedge funds.
Pierotti was one of a group of more than a half-dozen friends and associates of Shkreli who received a total of about 2 million shares in a shell company that conducted a reverse merger with Retrophin in 2012 to help it become publicly traded.
Prosecutors alleged that Shkreli secretly controlled those shares, or expected to control those shares, but did not disclose such control as required to the Securities and Exchange Commission.