Martin Shkreli, the 32-year-old CEO of Turing Pharmaceuticals, has been taken into custody by the FBI on charges of securities and wire fraud for allegedly illegally taking stock from Retrophin, a biotechnology firm he started in 2011, according to Bloomberg.
According to an unsealed indictment, Brooklyn federal prosecutors have accused Mr. Shkreli of misleading prospective investors in MSMB Capital Management while he was acting as manager for the hedge fund. Mr. Shkreli allegedly misled prospective investors about the fund's assets under management and his prior performance as manager to get them to invest, according to The Wall Street Journal.
Prosecutors claim Mr. Shkreli also misled investors about the fund's performance by leading them to think they had earned huge profits when the fund had lost money. To cover his trail, Mr. Shkreli allegedly paid investors back with cash and stock from Retrophin when they sought to withdraw cash from the funds.
Similar charges have also been brought against Mr. Shkreli by the Securities and Exchange Commission, a person close to the matter told The Wall Street Journal.
Mr. Shkreli was previously ousted by Retrophin and sued by its board. The company replaced him as CEO "because of serious concerns about his conduct," and the company has cooperated with the government's investigations into Mr. Shkreli, according to Bloomberg.
Although the charges pending against Mr. Shkreli are unrelated to his role as CEO of Turing Pharmaceuticals, he previously made headlines in September when the company raised the price of a 62-year-old toxoplasmosis medication by 5000 percent overnight. The outrage against Mr. Shkreli, whom the BBC has called "the most hated man in America," didn't subside after the price hike. Mr. Shkreli has stayed in the headlines for his decision to shell out $2 million for the only copy of Wu Tang Clan's album "Once Upon a Time in Shaolin."
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