Biglaw, Crime, Securities Law

Biglaw Partner Arrested With Martin Shkreli -- Pharma Karma

A Biglaw partner was arrested this morning!

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UPDATE (12/17/15 11:21 a.m.): Read the full Shkreli and Greebel indictment here.

I can’t wait for the Martin Shkreli movie. It is going to be awesome. Since becoming a household name for the most dubious of reasons — raising the price of a life-saving pill, Daraprim, by 5000% from $13.50 to $750 — he has launched a “serious” rap career, and spent $2 million on the sole copy of the new Wu-Tang album (perhaps as an effort to bang Taylor Swift). For his next act, he’s been arrested.

This morning, Shkreli was arrested on securities fraud charges. He allegedly used stock from his biotech company, Retrophin Inc., and used it to pay off unrelated debts. As Bloomberg Business reports:

[F]ederal prosecutors accused Shkreli of engaging in a complicated shell game after his defunct hedge fund, MSMB Capital Management, lost millions. He is alleged to have made secret payoffs and set up sham consulting arrangements. A New York lawyer, Evan Greebel, was also arrested early Thursday. He’s accused of conspiring with Shkreli in part of the scheme.

And this “New York lawyer” that also got arrested as part of Shkreli’s scheme? He’s Kaye Scholer corporate partner Evan Greebel (though he only recently joined that firm, having previously worked at Katten Muchin Rosenman for more than a decade). According to his bio on the Kaye Scholer website, he got his bachelor’s degree from Michigan and his J.D. from Georgetown. He specializes in mergers and acquisitions, corporate finance, and securities law. Yiiiikes, depending on how this case goes, he may have a whole new set of skills related to securities law.

Shkreli’s involvement with his former company Retrophin has been the subject of controversy for a few months now:

Retrophin sued Shkreli in August for misuse of company funds, claiming he engineered numerous transactions between investors in MSMB and the biotechnology firm. Similar allegations are laid out in the company’s regulatory filings.

The company alleged in a complaint filed in Manhattan federal court that, through a disastrous trade with Merrill Lynch in 2011, Shkreli cost MSMB more than $7 million, leaving it virtually bankrupt.

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And Shkreli has asserted he’s been depending on his attorney:

“Every transaction I’ve ever made at Retrophin was done with outside counsel’s blessing,” he said on the investment blog in February, without identifying the lawyers.

Very interesting. Could it be Shkreli was talking about Greebel? This is a case we’ll be closely watching.

The Kaye Scholer Partner Indicted In Pharma Case [Big Law Business / Bloomberg BNA]
Shkreli, CEO Reviled for Drug Price Gouging, Arrested on Securities Fraud Charges [Bloomberg Business]
Martin Shkreli arrested on securities fraud – his final chapter or just another one? [MedCity News]

Earlier: Ex-Hedge Fund Manager Turned Pharmaceutical CEO Doesn’t See The Big Deal Charging $750 Today For Life-Saving Drug That Cost $13.50 Yesterday [Dealbreaker]
Martin Shkreli Is Serious (About His Rap Career) [Dealbreaker]
Emo Bro Martin Shkreli Blows $2 Million On Sole Copy Of New Wu Tang Clan Album Because He Is Desperate To Bang Taylor Swift [Dealbreaker]

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