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Is Martin Shkreli redefining fraud?

Is Martin Shkreli a notorious, cold and calculating executive who committed fraud by robbing “Peter” to pay “Paul?” Or, is the 34-year-old Wall Street wunderkind a non-conformist who marches to the beat of his own personal and professional drums?

Shkreli gained immediate fame and infamy as the chief executive of Turing Pharmaceuticals. He first made headlines in 2015 for increasing the price of Daraprim, a drug that treats parasitic infections, from $13.50 a tablet to $750.

Vilified by everyone from politicians to the public at large, Shkreli responded to the outrage by buying another drug and promising to raise the price on that one too.

Shkreli confidently courting controversy, fearlessly trying tried to silence those working against him. When charged with illegally using Retrophin, his pharmaceutical company, to repay MSMB Capital investors, he vowed to outwit prosecutors.

Overall, he did not seem to be taking the grave legal matter seriously.

Last Friday, a jury took what he did very seriously. With their decision, they accomplished something that few, if any could ever achieve when dealing with Shkreli. They had the last word.

Following a five-week trial and five days of deliberation, jurors convicted the thirtysomething executive of three counts of fraud related to two hedge funds he ran. Collectively, Shkreli faces up to 45 years in prison.

While describing him as an “oddball” who refused to brush his teeth and slept in his office in a sleeping bag, his attorneys did provide a compelling defense. Getting Retrophin off the ground was motivated by Shkreli’s desire to reimburse his MSMB investors who actually profited from their initial investments.

Their client never intended to commit fraud and not one of his “victims” seemed to lose any money.

Prosecutors countered that Retrophin, a public company, should not have been responsible for lining the pockets of old investors. They claimed that Shkreli’s fraud took the form of misleading statements and outright lies.

Whether intending to commit fraud equals the actual commission of fraud will likely be argued at the appellate level. Shkreli may have the last word after all.

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Darryl A. Goldberg
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