Martin Shkreli (; born March 17, 1983) is an American businessman and convicted felon. Shkreli is the co-founder of the hedge funds Elea Capital, MSMB Capital Management, and MSMB Healthcare, the co-founder and former CEO of pharmaceutical firms Retrophin and Turing Pharmaceuticals, and the former CEO of start-up software company Gödel Systems, which he founded in August 2016.
In September 2015, Shkreli was widely criticized when Turing Pharma obtained the sole manufacturing license for the life-saving antiparasitic medicine Daraprim, and Shkreli immediately made that over 54 times more expensive (from to $750 per pill).
In 2017, Shkreli was charged and convicted in federal court on two counts of securities fraud and one count of conspiracy for activity unrelated to the Daraprim controversy. He was sentenced to seven years in prison and up to $7.4 million in fines. In the civil antitrust (monopoly abuse) case Shkreli was fined a further $64.6 million to be repaid to victims. On May 18, 2022, he was released early from the low-security federal prison in Allenwood, Pennsylvania.
Early life
Shkreli was born in Coney Island Hospital in the New York City borough of Brooklyn on March 17, 1983, to Albanian immigrant parents. His parents were Roman Catholic, and he said his religion has been "a guiding post" for him, although he does not believe in God. His parents immigrated to the United States and worked as janitors. He, his two sisters, and his brother grew up in a working-class community in Sheepshead Bay, Brooklyn. Shkreli was raised Catholic and attended Sunday school as a child. Shkreli attended Hunter College High School. Sources differ on whether Shkreli graduated from Hunter or whether he was expelled before his senior year and received the credits necessary for his high school diploma through City-As-School High School. He ended up in a program that placed him in an internship at Wall Street hedge fund Cramer, Berkowitz and Company when he was 17. Shkreli received a bachelor's degree in business administration from Baruch College in 2004.
Shkreli told Vanity Fair that he developed an interest in chemistry when a family member suffered from treatment-resistant depression.
Career
During Shkreli's time at Cramer, Berkowitz and Company, he recommended short-selling the stock of Regeneron Pharmaceuticals, a biotech company testing a weight-loss drug. When its price dropped in accordance with Shkreli's prediction, Cramer's hedge fund profited. Shkreli's prediction drew the attention of the Securities and Exchange Commission, which investigated Shkreli's knowledge about the stock but was unable to prove wrongdoing on his part.
MSMB Capital Management
After four years as an associate at Cramer Berkowitz, Shkreli worked as a financial analyst for Intrepid Capital Management and UBS Wealth Management. He then started his first hedge fund, Elea Capital Management, in 2006. In 2007, Lehman Brothers sued Elea in New York state court for failing to cover a 'put option transaction' in which Shkreli bet the wrong way on a broad market decline. When stocks rose, Shkreli did not have the money to cover his losses. In October 2007, Lehman Brothers won a $2.3 million default judgment against Shkreli and Elea, but Lehman collapsed before it could collect on the ruling.
In September 2009, Shkreli started MSMB Capital Management, which took its name from the initials of the two founding portfolio managers, Shkreli and his childhood friend, Marek Biestek. Shkreli and Biestek shorted biotech companies, then described flaws in the companies on stock trading chat rooms.
On February 1, 2011, in a naked short sale on an account it held with Merrill Lynch, MSMB Capital sold short 32 million shares of Orexigen Therapeutics stock at about $2.50 per share the day after its price plunged from $9.09, when the Food and Drug Administration (FDA) declined to approve the drug naltrexone/bupropion (Contrave). The stock price rebounded; MSMB could not cover the position, although it had told Merrill Lynch that it could. Merrill Lynch lost $7 million on the trade and MSMB Capital was virtually wiped out. Retrophin's 2015 SEC Complaint contended Shkreli had created MSMB Healthcare and Retrophin "so that he could continue trading after MSMB Capital became insolvent and to create an asset that he might be able to use to placate his MSMB Capital investors."