Martin Shkreli is best known for raising the price of Daraprim from $13.50 to $750 a pill. Photo / AP
Martin Shkreli is odd, his attorney told a federal court today.
The former hedge-fund manager's investors and colleagues made fun of him behind his back and wondered whether he was autistic.
Some questioned his sexuality, the jury was told.
"Is he strange? Yes. Will you find him weird? Yes," said Shkreli attorney Benjamin Brafman.
"But [his investors] used his genius and made millions... Despite his flaws and dysfunctional personality, Martin Shkreli is brilliant beyond words."
Shkreli, best known for raising the price of Daraprim - a 62-year-old drug primarily used to treat newborns and HIV patients - from US$13.50 to US$750 a pill, went on trial today for allegedly defrauding investors.
After struggling for more than two days to seat a jury, Shkreli's attorney spoke directly to the Brooklyn native's reputation as the worst of Wall Street.
"As Lady Gaga would say: He was born this way," Brafman said.
Federal prosecutors alleged that for five years Shkreli lied to investors in two hedge funds and the biopharmaceutical company Retrophin, all of which he founded.
After losing money on stock bets he made through one hedge fund, Shkreli allegedly started another and used his new investors' money to pay off those who had lost money on the first fund.
Then, as pressure was building, Shkreli started Retrophin, which was publicly traded, and used cash and stock from that company to settle with other disgruntled investors, prosecutors contend.
Shkreli repeatedly lied to investors, shareholders and the board of Retrophin to cover up his losses, prosecutors said today.
"Telling lies on top of lies - this is what that man, Martin Shkreli, did for years," said G. Karthik Srinivasan, an assistant US attorney in the Eastern District Court in Brooklyn.
Shkreli told investors that he had a successful track record as a hedge-fund manager and sent them false performance reports and backdated documents to cover up his losses, Srinivasan said.
Despite his flaws and dysfunctional personality, Martin Shkreli is brilliant beyond words.
He told potential investors that his hedge funds had millions of dollars more than they did, he said.
"That was a lie," Srinivasan said.
Nevertheless, he was repeatedly able to persuade investors to give him money, he argued.
"He did this by convincing them that he was a Wall Street genius. In reality, he was just a con man."
In the end, Shkreli defrauded investors and Retrophin shareholders out of more than US$10 million, Srinivasan said.
But Shkreli's attorney dismissed the notion that Shkreli's investors were victims.
"The people who invested... are high rollers," Brafman said.
"All of these people are worth tens of millions of dollars. They were betting on Martin Shkreli's genius."
One continued to invest with Shkreli even after a meeting in which Shkreli was dressed in fluffy slippers, he said: "They were not being asked to invest rent money."
One, he said, invested US$100,000 and made US$400,000.
And Retrophin board members, who are also expected to testify, were "thugs"who manipulated Shkreli, he said.
The colourful opening statements kick-started a trial that got off to a slow start as lawyers struggled to seat an impartial jury.
Over three days, more than 250 prospective candidates were dismissed, many because of their views of the defendant.
One prospective juror said today: "The only thing I would be impartial about is which prison he goes to."
Another said he didn't like Shkreli and "I don't understand why someone would take a medication that people need and jack up the price."
The potential juror's voice was shaking as he turned to Shkreli and raised his fist.
"I would just go over there... is he just stupid or crazy?" the potential juror said.
"He is probably guilty, and there is no way I can let him slide," a third potential juror said.
He then added that he didn't like that Shkreli had been disrespectful to the Wu Tang Clan.
Shkreli purchased the only known copy of an album by the rap group for $2 million and didn't release parts of the album until after Donald Trump was elected president.
In defending Shkreli, Brafman echoed an argument Shkreli himself offered in defending his price hike: He might be obnoxious. He might be outrageous. But what he did was not illegal. It was capitalism at work.
Brafman appealed to egos of the seven women and five men chosen for the jury: They had survived more than two days of intense questions and were "savvy New Yorkers" and would be able to use their "street smarts" to see that Shkreli is not guilty.
"You can't convict him for the people skills he lacked," he said. "If you want to call him names, call him names - just don't call him guilty."
When Brafman finished speaking, Shkreli stood and hugged him.
Shkreli got his first taste of Wall Street as an intern for a hedge fund firm started by CNBC personality Jim Cramer.
After striking out on his own, he developed a reputation for aggressive tactics, including betting a company's stock price would fall and then berating its executives on social media.
His battles earned him a spot on Forbes' list of "30 under 30" after Shkreli torpedoed a health-care industry merger and "antagonised" pharmaceutical giant Pfizer into removing its former chief executive from the company's board of directors, the magazine said.
Shkreli, now 34, is a "boy genius," his attorney has said.
The only thing I would be impartial about is which prison he goes to.
But one of Shkreli's most aggressive moves changed that narrative when, as chief executive of Turing Pharmaceuticals, he raised the price of Daraprim from $13.50 to $750 a pill.
When critics pounced, the live-out-loud Shkreli did not do his reputation any favours by calling a journalist a "moron," quoting defiant rap lyrics on Twitter and defending the price increase as a "great business decision."
"Our shareholders expect us to make as much money as possible," Shkreli said during a health-industry summit in 2015, dressed nonchalantly in a hooded sweatshirt and sneakers.
"That's the ugly, dirty truth."
These two images of the Brooklyn native are playing out in federal court this week as Shkreli faces eight charges that could land him in prison for years.
Packed into the second-floor courtroom in Brooklyn, several potential jurors said they had already formed strong opinions of Shkreli.
One potential juror told US District Judge Kiyo Matsumoto that Shkreli is "the price gouger of drugs. My kids are on some of these drugs."
Another said, "I know he's the most hated man in America," while another asserted that "from everything I've read, I believe the defendant is the face of corporate greed in America." All were excused from the jury.
Shkreli sat a few feet away by himself, intermittently appearing to write on a yellow pad or staring up at the ceiling.
Dressed in a gray suit and no tie, he yawned and leaned his head against his arm. In the back row of the courtroom sat his father.
During one break, Shkreli greeted friends in the courtroom and warned them to stay away from "fake news."
The trial is slated to last from four to six weeks, and Matsumoto told potential jurors that it "promises to be interesting and educational."
With news trucks stationed outside and more than a dozen reporters flowing in and out of the courtroom, Shkreli is facing intense media scrutiny.
Citing negative news coverage of his client - which included the New York Post front-page headline "Jury of His Jeers, 134 jurors out in 'Pharma Bro' trial: They all hate him"- Shkreli's attorney requested a mistrial, which was denied.
He also asked that reporters not be allowed to listen to potential jurors' voice their opinions about Shkreli, which was also denied.
Court officers confiscated a copy of one of the New York tabloids that covered the first day of the trial from one of the potential jurors.
"I think it's impossible for jurors not to see them. I have someone who is facing 20 years in prison," said Brafman.
Federal prosecutors alleged that for five years Shkreli lied to investors in two hedge funds and biopharmaceutical company Retrophin, all of which he founded.
But potential jurors appear to be struggling to separate Shkreli's public persona with the charges he is facing.
One juror told the judge that she had been in the health-care field for half her life and knew someone who used the AIDS medication whose price skyrocketed under Shkreli.
"I have cried with them," she said. "I don't think I could be the right person to sit" on the jury.
Even after advised by Matsumoto that Shkreli is not facing charges related to raising drug prices, the potential juror said she couldn't be impartial and was excused.
Shkreli's emergence on the national stage coincided with a larger debate about rising drug prices, and Shkreli appeared to relish the attention, or at least not shrink from it.
Even after he was arrested in December 2015, he spent hours on YouTube chronicling his life for fans and was eventually kicked off Twitter for harassing a freelance journalist.
When he appeared before a congressional committee last year, he smirked and grinned while refusing to answer questions. Afterward on Twitter, he called the lawmakers "imbeciles."
Shkreli's attorney urged him to stay quiet, but the former hedge fund manager repeatedly took to social media.
In April, he offered US$40,000 to a Princeton University student who solved a mathematical proof.
Our shareholders expect us to make as much money as possible.
In May, he pledged on Facebook to pay US$100,000 for tips leading to the arrest of the person who killed former Democratic National Committee employee Seth Rich.
Shkreli is "traveling to the beat of his own very unique drummer," Brafman has said.
When Shkreli asked this month for his US$5 million bail to be reduced to US$2 million, his loquaciousness worked against him.
Brafman told the court that Shkreli didn't have any cash and needed to pay taxes and legal fees.
But skeptical prosecutors noted that Shkreli had bragged about his wealth, including flaunting that he had paid millions for a Picasso painting, that one-of-a-kind Wu-Tang Clan album, and a World War II-era Enigma code-breaking machine used against Nazi Germany.
Those statements should not be taken seriously, his attorney responded.
"Tweeting has become, unfortunately, so fashionable, and when people tweet, they don't always mean what they say," Brafman said.
The judge denied the request.
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