The Federal Trade Commission (FTC) and a coalition of seven states filed a motion on Tuesday in the U.S. District Court for the Southern District of New York, asking a federal judge to hold Martin Shkreli in contempt for what they describe as repeated violations of a lifetime ban on his participation in the pharmaceutical industry.
According to the filing, Shkreli has traded in at least 60 pharmaceutical stocks since his release from prison in 2022 and has used livestreams and social media to broadcast his views on the business and management of those companies. The FTC and states argue that these actions contravene the court-ordered ban.
The coalition is requesting that the court impose penalties, including forcing Shkreli to forfeit all trading profits and divest any pharmaceutical stock he owns. They also want him to pay a fine equivalent to his profits from pharma trades and to face escalating consequences for any future violations, "including financial penalties and potential incarceration."
New York Attorney General Letitia James (D) said in a statement, "A court-ordered lifetime ban isn't a suggestion. Martin Shkreli has been livestreaming his pharmaceutical company trades for the world to see, in violation of the law. Shkreli's market manipulation and monopolistic tactics put investors and the public at risk, and we're going back to court to put a stop to his latest illegal behavior."
Shkreli gained notoriety in 2015 when, as CEO of Turing Pharmaceuticals, he raised the price of the anti-parasitic drug Daraprim by more than 5,000 percent. His unapologetic defense of the move—and his subsequent testimony before Congress that he should have raised the price even higher—earned him the moniker "pharma bro."
In 2017, Shkreli was convicted on three counts of fraud and sentenced to seven years in prison. He was released in 2022. Before his release, a federal court imposed a lifetime ban on his involvement in the drug industry, finding that he had illegally tried to stifle generic competition to Daraprim.
Despite that order, the FTC alleges that Shkreli has openly traded pharmaceutical stocks and discussed the industry at length, even encouraging his social media followers to invest based on his recommendations. This is not the first time he has been accused of flouting the ban. In 2023, the FTC asked the court to hold him in contempt for failing to pay a $65 million fine and for not cooperating with an investigation into his role in the formation of a software company called Druglike.
The latest filing underscores the government's determination to enforce the ban, which was part of a broader effort to curb anticompetitive practices in the pharmaceutical sector. As policymakers continue to scrutinize drug pricing and market competition, the case against Shkreli serves as a test of the courts' ability to rein in individuals who repeatedly defy regulatory and judicial constraints.
