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UPDATE 1-Martin Shkreli seeks to overturn part of his conviction

(Recasts story to focus on Shkreli's motion for acquittal)

NEW YORK, Sept 8 (Reuters) - Former drug company executive Martin Shkreli on Friday asked a judge to throw out part of his criminal conviction, a day after prosecutors sought to have him jailed until his sentencing.

In a motion filed in Brooklyn federal court, Shkreli's lawyers said their client was convicted of conspiring to manipulate the stock price of his old company, Retrophin Inc, after a prosecutor improperly defined a key legal term during closing arguments.

The motion does not seek to overturn Shkreli's conviction on two more serious counts of defrauding investors in his hedge funds. Those counts carry a maximum prison sentence of 20 years, though Shkreli is likely to serve far less time, in part because his investors did not lose money.

Instead, it challenges his conviction of conspiring to manipulate Retrophin's stock price by telling employees what to do with their shares. Shkreli's lawyers said a prosecutor falsely told jurors in closing arguments that Retrophin employees were automatically "affiliates" of Retrophin under federal securities law, which would restrict how they could trade their shares.

A representative for the prosecutors declined to comment.

The motion came the day after prosecutors asked U.S. District Judge Kiyo Matsumoto to revoke Shkreli's $5 million bail.

They said Shkreli could be a "danger to the community," pointing to a Sept. 4 Facebook post in which he offered $5,000 to followers who could grab a strand of Hillary Clinton's hair during her upcoming book tour.

The post prompted an investigation by the U.S. Secret Service, which is charged with protecting the former Democratic presidential candidate. Shkreli is an outspoken fan of President Donald Trump, a Republican.

"However inappropriate some of Mr. Shkreli's postings may have been, we do not believe that he intended harm and do not believe that he poses a danger to the community," Shkreli's lawyer, Benjamin Brafman, said in an email.

Shkreli, 34, was convicted in August of defrauding investors of two hedge funds he ran, MSMB Capital and MSMB Healthcare, and of conspiring to manipulate Retrophin stock. He was acquitted of stealing from Retrophin to pay back investors.

Before the trial, Shkreli was best known for raising the price of anti-infection drug Daraprim by 5,000 percent in 2015 while he was chief executive of Turing Pharmaceuticals. The move sparked outrage by patients and U.S. lawmakers, earning him the nickname "pharma bro." (Reporting by Brendan Pierson in New York; Editing by Bernadette Baum and Andrew Hay)