Tag: securities fraud

Big Pharma’s Big Jerk ARRESTED for alleged securities fraud

Martin Shkreli, the Turing Pharmaceuticals executive notorious for raising drug prices by obscene amounts (most notably raising the price of Daraprim, a drug used to treat AIDS patients, from $13.50/pill to $750/pill)  and being an in-your-face asshole about it, has been arrested on federal securities fraud charges:

Martin Shkreli, a pharmaceutical entrepreneur and former hedge fund manager who has been widely criticized for drug price gouging, was arrested Thursday morning by the federal authorities.

The investigation, in which Mr. Shkreli has been charged with securities fraud, is related to his time as a hedge fund manager and running the biopharmaceutical company Retrophin — not the price-gouging controversy that has swirled around him.

[…]

The federal charges are believed to parallel a civil lawsuit filed against Mr. Shkreli in August by Retrophin, whose board ousted Mr. Shkreli as chief executive in September 2014. In its lawsuit, Retrophin accused Mr. Shkreli of having used the company as a kind of personal piggy bank to help pay off upset investors who lost money at the hedge fund MSMB. Among the ways he did this, the lawsuit says, was by hiring some of these investors as sham consultants to Retrophin.

Big Pharma’s Big Jerk, as I like to call Shkreli, is not being charged over raising drug prices, but over allegations that he used Retrophin, a pharmaceutical company he was once the CEO for, as a piggy bank to pay off investors who lost money at MSMB, the hedge fund Shkreli co-founded. In addition to the criminal charges against Big Pharma’s Big Jerk, there’s an ongoing civil suit into the matter.

This couldn’t happen to a more deserving person if you asked for it.

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Republican Texas Attorney General Ken Paxton indicted on securities fraud charges

Everything is bigger in Texas, and that includes white-collar crime.

Republican Texas Attorney General Ken Paxton has been indicted by a grand jury on three criminal counts by a grand jury in Collin County, Texas (northern Dallas suburbs, including McKinney, Plano, and Frisco). Two of the charges are for securities fraud, the other is for failing to register with the Texas securities board:

The grand jury in the northern Dallas suburb of McKinney handed up a three-count indictment against Mr. Paxton several days ago, officials said. The indictment is to be unsealed on Monday, when Mr. Paxton is expected to turn himself in to the authorities at the Collin County Jail. The charges — two counts of first-degree securities fraud and one count of third-degree failure to register — are tied to Mr. Paxton’s work soliciting clients and investors for two companies while he was a member of the Texas House of Representatives but before he was elected attorney general in November 2014.

In the most serious charges — first-degree securities fraud — Mr. Paxton is accused of misleading investors in a technology company, Servergy Inc., which is based in his hometown, McKinney. He is accused of encouraging the investors in 2011 to put more than $600,000 in Servergy while failing to tell them he was making a commission on their investment and misrepresenting himself as an investor in the company, said Kent A. Schaffer, one of the two special prosecutors handling the case. The group of investors had been Mr. Paxton’s friends and included a colleague in the Texas House, State Representative Byron Cook.

[…]

The grand jury in Collin County, which began hearing evidence in early July, determined that Mr. Paxton’s failure to register with the state for his work for Mowery Capital Management amounted to a crime, and charged him with the one felony count of failure to register. Mr. Paxton had also failed to register with the securities board during his work in 2011 for Servergy, but Mr. Schaffer said they decided not to seek a failure-to-register felony charge from the grand jury in that instance because the statute of limitations had run out.

To put that into perspective, the top law enforcement official in the State of Texas is now under indictment for:

  • Encouraging his buddies, which include Texas State Representative Byron Cook (R-Corsicana), to invest in a technology company without telling them he was making money off of their investment
  • Misrepresenting himself while encouraging his buddies to invest in the technology company
  • Working for an investment advisory firm without registering with the Texas State Securities Board

Ken Paxton should resign the office of Attorney General of Texas immediately, as he is an absolute disgrace to Texas. Sadly, this kind of criminal activity by right-wing politicians in Texas is far too commonplace. There are good people in Texas, but it seems to me that they’re in the minority, especially when one considers how ridiculously easy it is for Republican crooks to get elected statewide there.

As I said above, everything is bigger in Texas, and that includes white-collar crime.