We've covered his travails on and off here, for about seven years. And, this afternoon, the able USDC Chief Judge Denise Cote in Manhattan has published her opinion on the FTC's claims that he engaged in serial, unlawful monopolistic attempts at cornering various US drug market-spaces, and then price gouging consumers -- and she's ruled. . . correctly.
She accepted the manifest weight of the evidence, to come to the $64 million figure -- just as we said she would. [If Vyera cannot pay the full $40 million, Martin is on the hook for all the difference between $64 million, and whatever Vyera does pay.]
And Martin will have to find a career outside of the life sciences, and outside of securities trading or advising on the same.
Here it is -- a 135 pager, in full, and a bit:
. . .[B]etween December 26, 2019 and July 14, 2020 alone, at a time when Shkreli was in prison, Mulleady and Shkreli communicated over 1,500 times.
In the few recordings of Shkreli’s conversations from prison with Vyera management that are part of the trial record, Shkreli openly discussed his control over Vyera. He observed that he had “EGM power.” Shkreli said “I have no problem firing everybody to be frank, if you guys can’t figure it out.” In September 2020, Shkreli told Mulleady that any dissenters amongst the Directors needed to understand that “being on the board of Phoenixus means, you know, you’re on the Martin and Kevin board. . . .”
Disgorgement may be imposed against multiple defendants so long as the order is consistent with equitable principles. See Liu, 140 S. Ct. at 1949 (remanding to the Ninth Circuit to determine whether “circumstances would render a joint-and several disgorgement order unjust”). Joint and several liability for disgorgement is properly imposed when multiple defendants have collaborated in an illegal scheme. S.E.C. v. Pentagon Cap. Mgmt. PLC, 725 F.3d 279, 288 (2d Cir. 2013). In First Jersey, an individual defendant was required to disgorge net profits accruing to his company where he was “primarily liable” for the fraud that created these profits, was “intimately involved” in the perpetration of the fraud, and was a “controlling person” of the company. 101 F.3d at 1475 (citation omitted).
Shkreli was the prime mover in this anti-competitive scheme. It was his brainchild and he drove it each step of the way. As Vyera’s founder and its largest shareholder, any excess profit gained from Shkreli’s scheme directly benefited him. Shkreli explains in his direct testimony that he took the actions he did at Vyera based on his belief that the “entry of a generic alternative to Daraprim. . . would have a significant effect on my investment in the company.” Liability for the sum of equitable monetary relief determined in this Opinion is, therefore, properly imposed against him.
The sum owed by Shkreli will be reduced by any monies paid by the settling defendants. A settlement payment may properly “be taken into account by the court in calculating the amount to be disgorged. . . .
It is critical to note that he cannot escape even a penny of this by filing bankruptcy. These debts follow him for life. And the two ways he amassed the fortune he once controlled -- are both now closed to him.
He may however, under the injunction, give away his ideas on science to the public generally, for free -- forever. But no one may pay him, or any affiliate of his, anything of value for them (to the extent anyone still believes his ideas are. . . valuable). Same with any investment advice or securities trading strategies. Same with being a D or O of any public company. That's all in a separate SEC order, entered now almost three years ago.
Onward. Justice it is said, is slow -- but thorough. "She do grind, very fine. . . ."
Grinning -- ear to ear.
नमस्ते
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