There seems to be a misconception regarding what Shkreli was found guilty of. The legal case here has very little to do with the pharmaceutical pricing controversy - it is a separate case based on a separate hedge fund that he managed. The gist of it is that he took people's money to start a hedge fund, lied to investors that the fund was doing fine when the hedge fund went belly up, but ended up returning everyone's money plus a sizable return when his separate pharmaceutical venture went well.
When fraud happens those affected don't usually get their money back much less a return on that money. However, it's pretty clear what he did is also fraud (false documents, not returning people's money when they asked for it) even if the fact that investors came out better makes the plaintiffs less sympathetic.
>When fraud happens those affected don't usually get their money back much less a return on that money.
That will be a footnote at sentencing. Federal sentencing is generally based on intended or actual loss, whichever is greater. Further, the judge is allowed to take into account intended losses from his entire course of conduct, not just the intended losses from the specific counts on which he was found guilty.
In other words, the fact that his investors lost no actual money will have little bearing on his sentence. I don't know what the actual amount he took in was, but he will be sentenced for a multimillion dollar fraud scheme, and because he went to trial and lost, he'll get nowhere near the minimum. The government likes to punish people for making them expend the time and effort of a trial (in 2012, 97% of federal cases ended with a guilty plea instead of a trial [1]). He's probably looking at 5 years at best.
I disagree. I think it will be a major factor at sentencing. First the fact that he did give them their money (with a significant return on it) back to the people well before the government got involved (meaning it wasn't a PR show) to me means there was never any intent for them to actually lose money. I think the judge will see it the same way. Because if that weren't true, he would never have repatriated the money back to pay them out. He would have just said "oops, I lost it" and continued about his regular business. As much as I dislike the guy, I do believe he didn't want to rip the people off, he wanted to try to salvage what he could to make himself look good get them their money. He just chose a deceptive, illegal manner in which to do it.
Also, harm/damage is a big consideration in sentencing. He broke the law, yes. But usually a violation of the law in this regard results in substantial losses. Because it did not here, the only damage is his violation of his contractual obligation to provide money back to those who said they wanted to cash out. By holding the money, he deprived them of their rightful property as per the contract they signed when they invested with him. And considering they would have a real hard time beating his returns, proving any sort of tort injury is essentially impossible. This leaves only the statutory violation, meaning he amazingly didn't necessarily harm anyone or their property but rather just broke the law. Given the lack of injury to the victims of his crime, I think he's likely to see a very light sentence.
Let me start by saying that what you are saying probably should be the way it plays out in this case. Everyone seems to have made money. I was just stating how it actually plays out in the vast majority of federal cases, and will likely play out here.
In this case, because of the amount involved, the guidelines will call for a substantial prison sentence (well over 5 years). There is actually a loss table (again, we're talking about the "intended loss") that determines a certain number of points for the loss [1] (plus 7 points for the "base offense level"), and that number of points is then used with the sentencing table [2] to determine the sentence. The judge is of course free to depart up or down from the guideline sentence, but the sentencing range determined by those tables will be the starting point. The odds that he will receive no prison time at all after having gone to trial and lost are effectively zero. The judge will likely cut him some kind of break because nobody actually lost anything - his lawyers will argue that he showed remorse after the fact by eventually making his victims whole - but that will have a minor effect at best. My best guess, having watched many of these things play out, is 4-6 years.
I should point out too that his being able to pay them back with profit really had nothing to do with his original taking of money. It is tantamount to pure luck that he was able to, entirely separately from the fraud, recoup their losses. Had it not been for that separate channel of money available to him, he wouldn't have had the opportunity to undo the damage done by his harm. And THAT is why this is a punishable crime. If you stab someone and then treat the wound and it heals entirely - even if you find, say, a tumor while you're treating the wound and end up unintentionally saving the person's life, you have still committed the crime of assault. It was only by coincidence that you helped the person out after the crime was committed.
Yes, exactly. Look at Madoff. Early on, it's entirely possible that he could have gotten lucky trading and made the money back. That still doesn't change the fact that he committed fraud. If we only punish the people who lose money, we create a huge incentive for more fraud, because it encourages yet more "double or nothing" behavior on the part of people who screw up.
I believe it is the SEC suing him for fraud, not investors trying to recoup losses. If you commit fraud in the financial industry, whether with or without harm, the regulator will come after you.
Not bad, merely ignorant. You're celebrating the incarceration of someone you presumably know very little about, all while searching for "true" victims ("perhaps the public?") to fuel your indignation.
No, I think you actually mean bad. (That's not to say I don't understand your sentinment towards me, but really... I haven't hiked prices on life-saving medicines by upwards of 1000%, etc., so at least I win on moral relatisivm points?)
This man has harmed quite a few people... or their insurance companies... which of course means harming of their customers, i.e. "us" (who can even afford insurance).
I know enough about Shkreli to consider him an awful, awful person. Do I need to know how much he loves his children, or something equally conceited and pointless?
No, no I don't.
EDIT: Oh, wait, you're one of those extremist libertarian types, aren't you? (At least judging by your most recent 5 comments).
EDIT: Look, if he hadn't been convicted of securities fraud, I would still be defending his rights as a... defendant, but now that he has been convicted, I don't feel sorry for him. (For ultimately unrelated reasons, as it turns out. I'm guessing I'm a bad person for that.)
> I know enough about Shkreli to consider him an awful, awful person.
That isn't what this trial is about. Just because you don't like someone because of one thing, doesn't mean they should be getting a harsh sentence for a separate crime (which apparently had no victims).
Perhaps instead of vilifying characters who break the not at all free market pharmaceutical industry, and name-calling people who espouse ideologies that conflict with your pre-existing beliefs, you should instead consider why a single guy was able to stir up so much trouble in your heavily regulated medical industry. Was it because there wasn't enough government to protect people? Or was it more likely due to an extremely high barrier to entry to the pharmaceutical industry imposed by the FDA? (And in other cases, excessive IP protections play a significant role).
> Look, if he hadn't been convicted of securities fraud, I would still be defending his rights as a... defendant, but now that he has been convicted, I don't feel sorry for him.
Unfair sentencing is just as much judicial malfeasance as is prosecutorial misconduct, unfair court trials or allegations. As citizens of America (which I assume, but do not know you to be) we should all champion fairness at ever level of the judicial process at all times, lest we ever find ourselves or our friends in the crosshairs of a court that we've allowed to give punitive sentencing to.
There are undoubtedly very good debates to be had on what might be considered a fair sentence for a crime of this nature, but if you're damning him for crimes completely disconnected from this case, then by definition you are championing an unfair sentence. That's the sort of thing that has allowed our judicial system to get away with so much unfair treatment in the past, and for all our sakes, we should root against it at every level.
> Oh, wait, you're one of those extremist libertarian types, aren't you?
This counts as personal attack and we ban people for that. In addition, it's not legit to use HN for ideological battle. (Irrespective of which flavors you're for or against.) So would you please not post like this again?
Glee at the suffering of others hardly marks a man as more evolved.
From where I sit, I do not see much difference between the man this article is about, and those enjoying schadenfreude at his expense. All are trapped in the same place.
Very interesting. I certainly hope he gets more time than I am expecting. Personally, my gut is saying 1-2 years. I'd be happy if he gets 4-6 like you expect.
Definitely going to be interesting to hear the judges words during sentencing. I was listening to the Michelle Carter sentencing yesterday, as I was following that relatively closely. Now I'm waiting to see what happens here, but this is much more cut and dry than that case. I'm only interested because it's Shkreli.
As a hedge fund manager, losing money is not illegal. The only illegal thing he did was lie about it so that he could get them their money back.
It would've been perfectly legal for him to lose all his clients money in the hedge fund, make them aware of this fact, and reap the profits from his pharma business without dishing it out to his hedge fund clients.
As far as I can tell, Shkreli turned a technically legal "I fucked up and lost your money scenario" into a technically illegal I fucked up, lost your money, but got it back to you scenario.
If I was part of Shkreli's hedge fund, I would much prefer to be involved in the latter scenario than the former.
Sure, I could sue Shkreli to recoup some of my hedge fund losses, but this way they didn't need to.
> The only illegal thing he did was lie about it so that he could get them their money back.
You're missing the point; giving his investors 'their' money back was the thing he did that was unethical and illegal. If you're a fund manager and the value of your portfolio goes down after making bad bets, you can't just inject your own money into the fund to make it look like you have a positive track record so that you can solicit more outside funds.
You're grasping for ways to punish this guy because you don't like him. The fact is, he made a mistake and wanted to pay back the people he made a mistake with.
I'd say it's exactly the opposite. The guy blatantly broke the law, but you seem to he very attached to him because you see him as some kind of noble do-gooder.
At the heart of it Shkreli was robbing Peter to pay Paul.
He took some of Retrophin investors profits and used it to pay back his investors in MSMB. Those profits should have gone to Retrophin investors.
From the perspective of the hedge fund, this is a pretty bad spot to be in. Retrophin investors will be looking to be made whole for the money Shkreli gave to MSMB investors.
I would imagine that this is how Ponzi schemes start.
If you lie about the nature of an investment your fund is doing it is fraud, even if the investment you have secretly been doing turns out to be successful.
Most ponzi schemes and unauthorised trading start with someone trying to make up for a loss they made and hoping they will fix things and everyone will be made up. That doesn't make it less serious.
It may look surprising given the hatred of bankers here, but it's a profession based on honesty. A guy got banned from the city in London for regularly frauding on his train tickets.
Yes, this is why - regardless of the outcome - he needed to be charged. People shouldn't be able to think they can get away with a thought process that equates to "I can defraud people and if my plan doesn't work out I'll find some other way to make it right." Fraud is fraud, and if you make it "right" via some other channel you haven't really made it right. You've gotten lucky and made your fraud look better.
> As much as I dislike the guy, I do believe he didn't want to rip the people off, he wanted to try to salvage what he could to make himself look good get them their money.
I think his behavior in both this case and in his "pharmaceutical" endeavor clearly demonstrate his willingness to rip people off.
I'm pretty sure the "no harm no foul" defense doesn't hold water in a fraud case. A Ponzi scheme is illegal the entire time (because it's fraudulent) even though the early investors receive returns.
I'm pretty sure it does. A ponzi scheme absolutely does harm people through fraud, namely everyone left holding the potato. Sure, it doesn't harm everyone involved, but many people are harmed because of fraud.
In Shkreli's case, he didn't actually harm anyone through fraud, because although he committed fraud, he got them their money back through entirely legal, non-fraudulent means.
Getting money back is just one point in the probabilistic set of possible outcomes. Investment is all about risk, therefore you really cannot ignore that part.
Completely over the top illustrative example: you give me money for ten years to invest in real estate, because your investment portfolio is lacking in that sector. I blow it all on cocaine and hookers, then when the money is due I get nervous, buy lottery tickets and win. You get your money back, with a nice profit attached in the upper parts of what could be expected by a real estate investment. Was I a faithful manager of your money? Hell no! If you wanted lottery tickets you would have bought them yourself.
Yeah, except Shkreli's handling of the HF money was not fraudulent (he didn't blow people's money on cocaine and hookers, or blow it on anything really, the hedge fund just did poorly).
A coverup is a coverup. If he cannot stand up to his investments doing poorly he has no place in the institutional investment business. If you fake (or hustle) good results to lure in the next batch of investors, yes, that is fraud. It would be an entirely different case if he would have let his funds tank but compensated the losses of his investors with large put nominally unrelated personal donations (assuming that the investors are the actual owners of the money invested, not some middlemen fiduciaries). The illustrative purpose of my example was not how bad cocaine is, it was how bad being deceptive about the nature of an investment could be even when it turns out to be successful.
> The government likes to punish people for making them expend the time and effort of a trial
While I understand why this is true, I hate it about our legal system. If you're not guilty then you shouldn't be coerced into a plea because of the draconian maximum punishment they hold over your head.
This is evident nowhere more clearly than drug convictions, where they can lock you up for the rest of your life because you're doing something they don't like.
It's probably even simpler - the conviction is the deliverable produced by a prosecutor, and the thing that moves their career forward. So they are incentivized to always go for the harshest possible punishment, in the same fashion that a company chooses profits over everything else.
The system isn't malicious, it's just not designed to counteract this sort of thing.
Prosecutors don't charge people if they aren't fairly confident that the evidence will result in a conviction. However they will also be willing to bargain for a plea to save the effort and expense of a trial. This lets them get more cases through the system in less time. They (or the police) might also try to pressure a suspect to confess, just to see if he will. That saves them even more time.
So bottom line, you should never admit or confess to anything. If the prosecutor has enough evidence, he'll probably start with an offer of a plea deal. If his evidence is marginal, he might try to get a plea but likely won't bring charges if he thinks his chances in court are iffy.
If you go to trial anyway, in the face of strong evidence against you, then you've probably lost your chance at a light sentence, modulo how good a defense you can afford.
However often that may happen in non-computer cases, it doesn't appear to have happened in this case; you can read the whole indictment in less than 4 minutes.
> In other words, the fact that his investors lost no actual money will have little bearing on his sentence
AFAICT, the Retrophin investors lost actual money. The losses came out of gains and reduced them, and they still had net gains from Retrophin, but they lost money to the fraud.
Isn't Mr. Shkreli one of those Retrophin investors, too? Like, he could have made his defrauded hedge fund clients whole out of his stake in Retorphin, rather than from Retrophin as a whole.
This is what really confuses me. I haven't found a source that actually specifies what specifically he was found guilty for. At least one of the charges was about defrauding Retrophin investors, but he was found not guilty on several charges, so it's hard to tell. Quotes like this make me think that he was found not guilty on that charge:
> Shkreli said during a press conference after the jury's announcement that he was "delighted by the verdict" since he was found not guilty on a key charge regarding his former drug company Retrophin.
I could see that he was expecting something like that based upon his press conference outside the courthouse. I think he's in for a very rude introduction to the concept of "intended loss" and the federal sentencing system in general.
Not claiming any knowledge on the subject, just wanted to back up suggestions of his expectations with evidence. We'll see what happens. Personally I'm rooting for him, I think he's misunderstood.
I just think he's generally misunderstood and undeservedly hated. While I don't dispute he committed crimes and should be punished for that, it's compounded with his existing bad reputation over the completely legal and unremarkable Retrophin move. There's been a massive smear campaign against him and he has been unjustly dragged through the mud over that.
Granted his social awkwardness and attention seeking threw a lot of fuel on that fire, so he's partially at fault for encouraging it. But if you look past those immature antics he's a smart and productive member of society. It would be a shame, in my opinion, if he winds up in prison for several years. I think a fairer sentence would be a big fine and parole.
What's the definition of "intended" here? I would not normally say that someone desperately covering up business failures as they keep running it intends there to be any loss.
> When fraud happens those affected don't usually get their money back much less a return on that money.
He defrauded and stole money from the investors in the pharma company to repay the people he defrauded and stole money from in the hedge funds. The one set of victims getting a return only happened by stealing returns belonging to the other set of victims.
> However, it's pretty clear what he did is also fraud (false documents, not returning people's money when they asked for it) even if the fact that investors came out better makes the plaintiffs less sympathetic.
Criminal cases have separate prosecution and victims, but not plaintiffs. It's the victims (well, one of two sets of them) that are potentially less sympathetic for the reason you describe.
> He defrauded and stole money from the investors in the pharma company to repay the people he defrauded and stole money from in the hedge funds. The one set of victims getting a return only happened by stealing returns belonging to the other set of victims.
That is not at all what I read. It seemed like he personally made a lot of money from his pharma business, and used that to repay the investors of the fund?
True. It'd be like robbing a bank, using the money from that robbery to, say, start up a successful business, and then discreetly give the money and interest back. Money taken on false pretenses, regardless of what you end up doing with it or if you end up getting lucky and being able to pay it back, is still a crime.
There was a joke floating around somewhere (Matt Levine I think?) that one strategy to avoid a jury trial proceeding was to become so publicly infamous that it would be impossible to select an unbiased jury. Clearly didn't work out for Shkreli in this case.
Well, that and he actually was guilty. Just like being nice shouldn't be enough to get you off the hook when you're guilty being an asshole shouldn't be enough to get you to be declared guilty when you're not. In this case the system simply worked as it was designed to.
Nah that's stupid. It might delay your trial but do you really think they would just say "oh ok we won't bother"? Of course not - they'd just go ahead with the least biased jury they could find.
You mean, if criminal charges against Trump go to trial, which is far less likely than impeachment (which is tried by the Senate and has no requirement for impartiality) going to trial.
The issue with this is that I often think of a people, that are not following media (so would not know him at all), to be usually more on a conservative note with strong values. If such a people would meet Shkreli, they would send him straight to the jail.
Which, all things considering, is ridiculous. People shouldn't be able to be convicted because they're assholes (even if they are).
I don't live in the US, but being convicted by a "jury of your peers" is frankly, ridiculous. When has the average person been able to grasp complex matters relating to say, securities fraud? Most people aren't even able to stay out of debt.
A panel of judges with specialised experience often makes a lot more sense than a jury.
Edit: and for those voting me down, at least explain why you don't agree.
Relying exclusively on bench trials seems unappealing to me (and I guess to James Madison, who enshrined the right of trial by jury in the Constitution) because it creates a much easier environment for an arbitrary court system to throw people in jail who are innocent and removes other protections like jury nullification. You could look at Japan, which tried to solve its problem of innocent people going to jail by introducing a lay-judge system (kind of like jurors who can ask questions during the trial), for a real-life example of some of the problems you might have.
Clearly the US system is far from perfect but I don't think getting rid of juries would make it better.
Also, in practice, judges make rulings on things outside their expertise too.
"because it creates a much easier environment for an arbitrary court system to throw people in jail who are innocent and removes other protections like jury nullification. You could look at Japan, which tried to solve its problem of innocent people going to jail by introducing a lay-judge system (kind of like jurors who can ask questions during the trial), for a real-life example of some of the problems you might have."
Practically, united states of america have biggest incarceration rate in the world, one of the most expensive legal systems (if not most expensive) and quite long sentences compared to other western countries. Jury nullification is basically never used and majority of jury members don't know about it.
I am not saying that other countries have flawless awesome court system, definitely not. But I have yet to read something that would convince me that jury is better or at least worth additional expenses.
You're right the US has a huge incarceration rate, but jury trials have nothing to do with this, since in the US trials functionally do not exist. I don't remember the numbers exactly (and they are changing and they differ by state/federal) but something like 1-5% of people thrown in jail actually go to trial.
But wouldn't the fact that trials might be favoring conviction (I'm not saying they do, but just as a hypothesis) also drastically change the outcome of those non-trial cases (mainly plea bargains, I guess)? If I expect to be convicted, I'm more likely to agree to a worse plea bargain.
That might be true but it was not my point. I was merely arguing that not seeing many cases actually go to trial is not an argument that can be made in this case.
Juries convict, but judges sentence. The incarceration rate is high because of strict sentencing guidelines written in the law and voters electing tough-on-crime judges. Eliminating jury trials would change none of that.
and Legislatures legislate. The strict sentencing guidelines are the result of "Law and Order" laws (both sides of American politics have their favorite targets). I too agree, eliminating jury trials would change none of that.
And you think getting rid of juries would help, or at least not make things worse? One of the reasons it's so high is that most cases are resolved as part of the plea system and never go to trial.
Isn't the main issue with a jury that is inherently unpredictable, and some people would prefer taking a decent plea over a bad verdict? People that aren't guilty shouldn't be forced to take a plea because the alternative could be worse. That is just wrong in every single way.
I agree that the use of plea bargains in the system today is deeply troubling. But getting rid of juries doesn't help. You still have a situation where the prosecutor can tell you your choices are going to jail for two years or taking your chances in court and maybe going away for decades, and you still have the inadequacies of the public defender system. The jury system is one of the parts of the system least in need of reform.
Which happens because of power prosecutors have (ability to decide charge which makes all the difference - plea can make difference between a year and risk of 30 years in prison) which has little to do with jury vs judge. Majority of defendants deciding that they don't want to risk (or cant afford) a day in court is not an argument for that system.
His argument was that juries prevent "arbitrary court system to throw people in jail who are innocent and removes other protections like jury nullification". There is nothing observable that would confirm that.
They don't do that, they prevent pretty much nothing.
It says nothing one way or the other because the system isn't being used in those cases.
Put simply, if you want to make claims about whether jury trials or bench trials put more people in jail wrongfully by citing US incarceration data you have to somehow contend with the fact that the vast majority of cases don't go to a trial of any kind. Or at least have an argument as to why switching to bench trials would change that circumstance.
The rate in not because of juries (most cases end up in guilty pleas anyway). It is 90% war on drugs and 10% "tough on crime" mentality which emphasizes punitive aspects and produces thing like mandatory minimal sentences which do not allow to treat things on by case basis. But mostly it's war on drugs.
I think at the very least there should be some kind of juror training process. You'd still tap people from the general public, but these people could maybe serve up to 5 year terms where being a juror is their full time job for that time period, they're trained in advance, they go through some kind of testing period, maybe shadow a couple other juries, and then they go on to serve on real juries. Obviously this would be a paid position much like a postal employee.
Besides being extremely disruptive to jurors' lives, you also have many of the same problems of an all-judge system (people becoming too close to prosecutors and wanting to the rule the "right" way, etc.) without the mitigation provided by the bar and full legal training.
Seemingly free and "just" governments have done much more "disruptive" things in the past, so there is precedent. E.g. Conscription and mandatory military training.
I'm a Libertarian, so I'd say No. But my point was that government has in the past done things that have been highly disruptive to their citizens' time.
> People shouldn't be able to be convicted because they're assholes (even if they are).
He wasn't convicted because he was an asshole. He was convicted because he broke the law. I think the fact that he was acquitted on 2 of the 5 counts is evidence that the jury made a determination based on facts, rather than their feeling towards him.
That being said, in a trial in the US, the judge applies the law, and the jury determines the facts, especially as they pertain to the credibility of testimony. If the defendant is an outrageous asshole, it's possibly more likely that the jury would interpret inconclusive evidence less favorably. I don't think that's necessarily the worst thing in the world, and it's also not clear that a panel of judges wouldn't be subject to similar biases.
Shkreli was first investigated by the SEC in 2003, and had two multimillion dollar judgements against his two bankrupt hedge funds for failing to cover puts and short sales.
So when he shows up running a new company, it's not unimaginable that he was on some people's radar.
It's a check/balance against state power, i.e. the judicial system. Many countries have used this method for centuries. It's not ridiculous because the idea is that (the diverse selection of) your peers are equal to you in most ways, so are able to fairly judge you. A judge still has a lot of power and usually ultimately the decision goes to them as far as sentencing etc.
Right. But thing is, they are not actually equal on specialised matters? I understand that it works when you're dealing with things like murder. That can be relatively clear.
But how about hacking? Securities fraud? Money laundering? Tax fraud? These are all highly specialised issues that the average person knows nothing about. No average person, unless they have an interest in it, will be able to make a good call on such a case.
There is a significant role for judges in trials as well, especially on complex technical issues. It's up to the judge to decide all "matters of law", for example which conduct would (if it happened) violate a law and which wouldn't. A judge can even throw out the indictment entirely, finding a defendant innocent as a matter of law, if they determine that the conduct alleged isn't actually a violation of any laws, even if it did happen. In complex fraud cases indictments being thrown out (or overturned on appeal) by judges isn't all that uncommon either.
Where it goes to a jury is when there's a dispute of fact rather than law: the judge has determined that whether the defendant violated the law or not depends on a fact disputed between the prosecution and the defense (e.g. whether the defendant actually did or didn't do something, or what the defendant's intent was). The jury then decides whether the facts support conviction, although even then they're typically guided by very specific instructions from the judge about what they would have to find in order to convict.
Just some clarification for those readers not in the U.S.. You as the defendant do not have to select have your case tried by a jury. You can select to have a bench trial instead. There is a presumption of innocence for the defendant, so the prosecutor has to show "beyond a reasonable doubt" that the defendant committed the crime in question. Juries find defendants not guilty more often then judges do. So if you want a society that better reflects the maxim, "better 10 guilty men go free, than 1 innocent man go to prison", then juries are empirically better.
Even if you ask for a bench trial, the state can request a jury trial on your behalf since the presumption in law is that juries are objectively better.
These things can be (and are) explained. Trials that contain complex technical violations tend to take longer, sure. Judges, expert witnesses, lawyers all spend a huge amount of time learning about/explaining these issues. It's especially incumbent upon the prosecutor to explain complicated issues -- if the jury can't understand someone's guilt, they are less likely to consider someone guilty beyond a reasonable doubt. Which is very, very good: it sets the bar higher for conviction, and it encourages the state to, if it wants to convict, make simpler clearer laws. Complex morasses of incomprehensible laws are not necessary and only serve the interests of those who can pay to create or avoid them.
Also, none of these subjects are so difficult and complicated ordinary people cannot understand them. I've never heard of a trial requiring any real deep knowledge, like requiring jurors to have a serious understanding algebraic geometry or quantum mechanics or phenomenology. Hacking can be explained to ordinary people. People are not dumb. People do their own taxes and understand taxes. Trained professionals are not elite superheroes who are the only ones who can understand the world well enough to understand the difference between right and wrong. Untrained people can't do a professional's job, but they can definitely (with some help and background) tell when a professional has committed a crime. This case is easily understandable. I'm not a securities expert but I can make a fine assessment here just from reading an article, even without hours and hours of doing nothing but learning about the specific case and law (which is what jurors get); we all know what fraud is.
Honestly, aren't you underestimating your own intelligence?
Plenty of things can be simplified for non professionals, but the nuance of certain topics is then often lost. A single word in a written law can matter a lot.
No disrespect to anyone, but can an average career teacher understand the nuances of securities law? Can (s)he understand the actual difference between tax avoidance and tax evasion? Some can, absolutely. Others definitely can't and are operating way out of their league.
Lawyers and prosecutors are great at creating stories, but isn't what matters or not whether the law has been broken?
As an example; I had a tax issue (different interpretation of a certain law) but retained an amazing tax lawyer. He was _great_. The way they juggle the story around without lying, yet drawing the line very close, is amazing. Based on personal experience, I just don't think it can work without subject experts.
Amazing charismatic lawyers (or prosecutors) will be able to bend an outcome, and that is just not right.
>No disrespect to anyone, but can an average career teacher understand the nuances of securities law?
Yes they can, that's exactly the position I outlined. After a week of doing nothing but learning about securities law every teacher I've met is capable of this no problem. Teachers are perhaps a bad example here though, they are highly educated (many have masters' degrees, most have bachelors) and interested in learning. But to make your argument stronger, take a minimum wage fast food worker with a GED, yes I think they are capable as well.
>Lawyers and prosecutors are great at creating stories, but isn't what matters or not whether the law has been broken?
Kind of. In fact in the US legal system this is not all that matters, because the law is often vague and abstract and sometimes obviously morally wrong. The purpose of the jury is exactly this, it's a check on a cold soulless system destroying lives robotically; not only must a law be broken, but you also have to convince a group of fairly normal human beings that what you've done is horrible enough you deserve to be punished for it before you are punished.
>Amazing charismatic lawyers (or prosecutors) will be able to bend an outcome, and that is just not right.
I agree with you here, and this essentially means the rich get away with things the poor are punished for. This will always happen, will it not? People who are able to present a more convincing argument in their defense are less likely to be convicted in any legal system? I think things can be done to mitigate this, yes, and they start with a simpler criminal code (fewer crimes) and more equal access to legal talent, like better funded public defenders.
Yeah, but judges are no better at interpreting the law many times. If you don't believe me, go read some of the decisions by americas Supreme Court. For example they said a man was black therefore no a man therefor he had no right to sue in court, which basically means no rights at all. How they missed the part about due process I don't know.
The judge/jury distinction is basically orthogonal. Judges who hear a case are not necessarily experts. And by the same token, one could easily imagine a system where a jury had to be composed of experts in the field. I'm not convinced that would be a good thing to do, though.
You can always request a bench trial (which must be approved by the prosecutor), and you probably should for any sufficiently complex matter, where bench trials have a 55% acquittal rate vs 80-something % for jury trials (if someone wants a source, I'll try to find it; these figures came from a study). Jury trials work when there are emotional and subjective aspects, especially around intent. The jury in Shkreli returned to the judge for a formal definition of fraudulent intent, and then he was not convicted on wire fraud, meaning that they didn't find for specific intent. If the jury was not properly instructed on the elements of the crime and the issue was raised, it may be a reversible error and I'm anxious to see how the appeal is argued.
Sure, the point is there is no perfect system. This is just the best we've been able to come up with over a few millennia, and no we don't execute wonderfully and certainly our voting/jury population is full of interesting ideals, but it's what we have and it's _mostly_ worked over time. I'm not sure where you are but I'm curious to know of other systems considered "better"
I’m based in Belgium. Definitely not perfect, but different countries use different systems. In general, juries are only used when dealing with murder cases. All other issues are ruled upon directly by judges, who makes a direct interpretation of the law. If you’re dealing with a tax case, you will generally be assigned a judge somewhat familiar with tax law. Same if you’re dealing with a contract or a commercial issue, etc.
One can expect any judge to be an individual with above average intellectual ability.
>Which, all things considering, is ridiculous. People shouldn't be able to be convicted because they're assholes (even if they are).
Why not? This is basically what the law does as well: codifies what society considers punishable assholery (e.g. murdering people or stealing or etc...).
So convicting him because he has been as asshole (even if it's in an unrelated case) is not that different to convicting him for being guilt on this or that legally defined behavior -- it's just not written down in a law book.
> A panel of judges with specialised experience often makes a lot more sense than a jury.
This would make sense in a country where trust in authorities is high, and people generally believe that the judges and the justice system is impartial and fair, without too much personal and hidden agendas.
But in a country where the trust in the system is lower, a jury of peers provides a safety mechanism so that the justice system cannot diverge too far from the point of view of the "common man".
That's the kind of claim for which it's useful to have a citation. Because it's not generally true. This is an old study ('76), but they found that the jury selection processes biases against both high and low educational attainment, for example: https://www.jstor.org/stable/3053202?seq=1#page_scan_tab_con...
One of my friends just served on the jury for a murder trial. He's got a Ph.D.. From my recollection, at least two of the other jurors also had postgraduate degrees.
Remember that the jury selection process is managed jointly -- which somewhat naturally leads to the clipping off of people at either end of the extremes that the defense and prosecution are concerned about.
Then I guess it is fortunate that neither the defense nor the prosecution get to just select whichever jurors they want without input from the other side.
The "jury of your peers" exists to provide a contextual moral component to the law. If your peers think you did no wrong, it doesn't matter what the letter of the law says: a crime that is justifiable to society deserves no punishment.
Conversely, if what you've done is not justifiable to society, you should be punished for it even if it is not a crime. The easiest way to understand this is when first-mover advantages run amok. If you're the first person to think of some dastardly evil, you should not be permitted to do it just because nobody has yet written a law prohibiting it. Like, say, the Coca-Cola Corporation is not innocent for putting addictive substances in their drinks simply because it wasn't illegal at the time. And Shkreli's price gouging doesn't sit well with anybody either. A person's ignorance about some harm does not constitute permission to commit that harm against them.
>When has the average person been able to grasp complex matters relating to say, securities fraud?
The defendant has an attorney whose job it is to explain these matters to the jury.
First, a judge can usually give a "directed verdict" of the person is obviously innocent.
Secondly it is much easier to pay off a judge and keep it quiet than a bunch of random jurors.
Thirdly judges can become calloused by virtue of their continued sentencing people to prison. They won't have the empathy that the jury will feel for both the accuser and the accused.
Fourth, the jury can ignore an outrageous law. For example oftentimes they refused to convict escaped slaves in the north.
Putting your freedom in the hands of one person who may very well be corrupt is much more dangerous than puttIng it in the hands of regular people.
Additionally I can't remember where, but I heard that 10 people or so working together usually come up with as good a solution as an expert anyways.
Try taking a attitude with a judge and see how much Contempt of Court you can rack up.
In modern times we've arrested plenty of performers, Lenny Bruce, various rock musicians for being "lewd" or other retarded reasons. It only gets worse farther back you go.
As a society we love to lock up those who make us feel uncomfortable or are "weird".
Did he make the investors their money back (plus a return) by vastly increasing the price of a drug(s)?
That seems to me morally evil and also very suspect. Although I'm sure the rigidity of the legal system would not allow this kind of inference to be made or pursued legally.
It would just seem to me as a legal/pharma layman that basically a bunch of sick people got screwed so that some investors (gamblers imo) could get their money back.
In the financial service industry there is very little tolerance for fraud. Fraud with or without losing money will get people in trouble. A trader with a massive unauthorised position is as likely to be sanctioned if this position has a positive P&L than if it is a loss.
Similar to OJ's recent parole that had nothing to do with the murder he was accused of committing. MSM, the previous victim's families, etc, seem to be conflating the two.
That's different, though. The goal of a parole suitability hearing is to determine whether an inmate poses an unreasonable risk of danger to society if released from prison. A data point like "this prisoner murdered some people" is very relevant to that determination.
OJ's parole was fair, and done by the book. OJ's sentencing for the armed robbery (30 years - his friends who brought the guns, and had a number of prior felonies all got probation) unfairly reflected his murder trial. The judge and jury were almost certainly out to get him.
OP is pointing out that because Shkreli initially became infamous for his drug price raising, many members of the public are probably seeing ‘Shkreli found guilty’ and assuming it was because of that incident, which many felt was wrong and immoral. This article (And other coverage of the trial) doesn’t make any such claim.
I use to hate this guy, then I saw the Vice interview on him. It was nice to see his side of the story.
I don't know much about this case in particular. It was kinda sleazy to see the congress question him about his price increases when they knew damn well it was perfectly legal and they haven't done anything to stop it. Shkreli seems to be trying to expose this hypocrisy, but the news loves their stories.
> Prosecutors argued that Shkreli lied to investors in two hedge funds and the pharmaceutical company Retrophin, all of which he founded. Shkreli told investors he graduated from Columbia University, that his hedge fund was large and profitable, and that he had hired an auditor, they said. These were all lies, according to prosecutors.
"but he had a nice twitch stream" is just about the most absurd defense of someone involved in large scale corporate fraud I have witnessed in a long time
When the defense gets absurd, I go looking for the defender's agenda.
In this case, the original commenter wants to tar all centralized institutions as corrupt (congress, news, etc). His strategy is to paint Shrekli in the best possible light, to make him a martyr for the cause.
He even paints Shrekli as another Snowden:
> It exposes it. Not quite as monumental, but a Snowden moment. Remember, congress did squat about the price gouging, because that's what they get paid to do.
Interestingly, his fraud seems to fall into two categories. Lying about his fund's bonafides and status on one side, and working hard to make sure those same investors got what they were expecting by founding a company, making it successful and paying them out from the profits.
It sounds like he definitely lied to investors, but he apparently didn't intend to steal their money, and took pains to make sure he did not cost them money in the end. Apparently most investors in the fund that lost all it's money ended up close to tripling their investment after he worked to replace the lost money in the end.
That leaves me thinking that "up to 20 years" is a bit harsh given the facts. Hopefully the judge will take that into consideration and give him a more lenient sentence.
fraud wrongful or criminal deception intended to result in financial or personal gain
stealing take (another person's property) without permission or legal right and without intending to return it
No, Shkreli didn't intend to steal their money since they gave it to him. However, he did in fact deceive them as to what he did with said money. So he was convicted of fraud.
Yes, I wasn't calling for no sentence, or not guilty, just that the details do provide mitigating circumstances IMO, and that might merit a lenient sentence.
Also of note, in the NY Times article[1], they call out how his defense tried to mount a defense based on the financial profit or personal gain portion of the definition.
The defense asked why Mr. Shkreli, if he wanted to commit fraud, didn’t commit fraud: He ultimately paid back his investors with shares of Retrophin, which became valuable, along with cash. His lawyers also asked how Mr. Shkreli profited, painting him as a hardworking oddball who, rather than throwing in the towel after his funds imploded, vowed to get his investors’ money back. He paid them back late, they argued, but he paid them back.
Wire fraud (1343) is both inchoate and a specific intent crime. To be convicted, it doesn't matter if there was an actual loss, but must be shown that the defendant intended to defraud, that is that "[T]he purpose of the scheme 'must be to injure'" (US v Regent). This is also the 2nd Circuit, which has the most substantive case law on wire fraud in the US (Regent, Starr, McNally, D'Amato, Skilling, etc). I should add that Shkreli was not convicted on his wire fraud counts, which are among the most blunt overused weapons a prosecutor has. Almost no one survives a wire fraud charge, yet Shkreli was. He was convicted of securities fraud and conspiracy (for the same), which are also specific intent, however, 'recklessness' specifically is insufficient in a wirefraud case (helpful but insufficient), whereas in securities fraud, scienter is often shown prima facie by reckless indifference for the truth. I believe most salespersons would fail this test in this context. And, virtually every startup I've ever reviewed has unwittingly committed securities fraud, and in the hands of a prosecutor, it's usually only a question of whether they are motivated to target you (for some crime, if only they can "find it") for general behavior they disapprove of, and less so motivated to target a clear crime.
You might say that Shkreli was charged with willfully pissing someone off, but he was also tried and convicted in a jury trial in Federal court and then unlike some sad sack foot soldier in the drug wars that prosecutors use to juice their numbers, Shkreli had and has the means for a first class defense, a defense whose singular and most brilliant tactic was telling Shkreli to STFU already.
Yes, Shkreli is probably at best guilty of being guilty. But please don't mind me at all if I enjoy this feel good item just a little more than the usual story about someone being guilty of being poor.
A lot of people who do bad things don't intend to do bad things. He got lucky he didn't fuck up like everyone else who thinks that way. It doesn't make him any better though, on a bad day he could've ended like the rest of them and then everyone would be screaming how awful Shkreli is.
> Just to be clear, this is LITERALLY equating business success with ethical/legal conduct.
No, it's equating restitution and intent with lenient sentencing.
Even if I grant that he intended to defraud people initially (which doesn't appear to be the case), that's still analogous to if someone stole your car, but later had a change of conscience, returned it, and had also fixed your dents and given it a new paint job to make amends. Are they guilty of theft? Yes. Should they be punished? Probably. Should they get the same punishment as someone who stole your car and crashed it, or stole it and sold it? I don't think so. That's leniency. You may have a different opinion.
He's not kidding. He's not human garbage. It's not astounding that different people have different opinions at all. Your post suggests that you're very emotionally attached to your opinion, which is not good. Nor takes into consideration some basic premises which are necessary for people to understand one another.
Spare me the faux "logically objective" pose. There is a reason he's known as the "most hated man in America". His actions have earned him this reputation.
>There is a reason he's known as the "most hated man in America".
Because that title sells clicks, much like every other piece of hyperbolic clickbait spewed onto the internet these days?
If he truly is the most hated man in America, by fact, then it's simply further proof that Americans, as a collective entity, are willingly at the highest extremes of ignorance.
You made it look like "Spare me the logic" was a direct quote but it wasn't, and it clearly is not a summary of what was meant. Always argue against what people say and (even more importantly) what they mean, not against your own not-quite-accurate-but-easier-to-refute version of what people say.
Okay, I'll bite. Why do you think he's human garbage? You felt strongly enough to reply, maybe you can muster the effort to explain why you think that?
The price increase for Retrophin from 12.50 to 750 was NOT for no apparent reason. The previous owners of the rights sold the rights cheaply because they were unable to make money selling Retrophin, and in fact had large losses for years, despite multiple large price hikes. Businesses that continually lose money shut down. Most of the costs are large fixed regulatory costs for each drug manufactured that a business owner cannot cut, so the only realistic alternative is to raise the price dramatically.
A USD 750 list price for a drug does NOT result in most people paying the list price. Most people get it via insurance, insurance companies pay a negotiated rate and you pay the copay (frequently higher than what the insurance company actually pays). Retrophin isn't a widely used drug so the effect on overall premiums was also tiny. His company literally offered the drug for free to anyone who for whom insurance didn't pay for it and who couldn't afford it. He also had a publicly stated business plan whereby he would use profits from Retrophin to invest in research into similar drugs which pharmaceutical companies have not been doing since Retrophin had been losing money.
Given the byzantine manner in which payments are actually made in the US, there simply isn't any other way to price an orphan drug, i.e. a drug that very few people actually need. The only way to make a business that produces life-and-death drugs needed by very few people sustainable is to price the drug very high due to very high fixed regulatory costs per drug manufactured. If you want to change this, it needs legislation and FDA reform. Demonizing businesses that raise prices to ensure they make a reasonable profit, will only result in drugs that are life-and-death for a small number of people either getting taken off the market or not coming to the market in the first place.
What's FAR more concerning is things like the recent increases in pricing for things like the Epi-Pen. Prices were raised 10x but also the expiration date on Epi-Pens is artificially short, so hospitals, schools etc are forced to throw away perfectly usable Epi-Pens for no good reason. Nobody talks about that because that price hike was by order of a senator's daughter. Shrekili just happens to be a bit of a PR nincompoop.
What we really need is a populace that thinks carefully and independently and a press that actually spends money on investigative reporting instead of relying on what politicians tell them to report, which helps their bottom line since it's much cheaper.
> Obtaining a license just to increase a drug's price from $13.50 to $750 for no apparent reason other than greed isn't enough for you?
This case isn't about that. Are you suggesting we should convict and punish people on trial for one crime because we don't like their past activities and behaviors? Even if those other behaviors were illegal, they should be considered during a separate trial that's actually pertaining to them.
That wasn't your question, was it? You asked why he's human garbage, I explained why. I wasn't defending or attacking this case, I was explaining why some think he is human garbage.
> Nowhere was I (or you) saying anything about this case.
Your specific words in your original response were "He's human garbage, let him rot." That response was to me saying I think the details of the case lead me to believe that I think he should a light sentence.
You very specifically noted through that euphemism that you think he shouldn't get a light sentence in this case because he's human garbage.
Edit: Sorry. That was someone else. I was specifically asking in context, but that wasn't you originally. Mea Culpa. Leaving it here with this note so people that saw it previously can see me retraction.
The ways that question are answered in this thread prove your assertion is false. This case IS about that, because without that, he'd just be one more pennyless felon.
Who said he shouldn't be punished? I simply stated that since he made restitution prior to charges being brought, perhaps that should factor into sentencing. I don't know who you're arguing against, or what you're really arguing, but it doesn't seem to have anything to do with what I've been talking about.
Al Capone wouldn't have had to evade taxes if he wasn't obtaining his income through illegal means.
I also see a distinction between Capone and Shkreli in that Capone's other actions which may have influenced his trial were myriad illegal activities that they couldn't get evidence for. Shkreli is just believed to be an asshole.
Is the illegality of the other activities really relevant if they can't be prosecuted?
The justice system is meant to punish specific crimes, which it did done in both cases, but that doesn't prohibit you as a human to see it as karmic justice, for someone being a garbage human, wether legally or illegally.
> Is the illegality of the other activities really relevant if they can't be prosecuted?
Normally, no (which I said explicitly in another comment here). In this case, the activities are linked. There's no need to evade taxes if your income isn't illegal.
Even so, I don't subscribe to the argument that it's entirely a good thing that we prosecuted Capone for tax evasion. We were unable to prove the actual criminal activities, so we instead looked at the fruits of those activities and used that.
Another way to look at it is that the justice system completely failed initially. We couldn't build a case for the major crimes, but we could for the lesser crimes. He was still guilty of both (this is of course assuming his guilt).
In Shkreli's case, we failed to prosecute originally because it's not a crime. The current case isn't related in the same way, and linking them and punishing in the latter because of people's perception of the former is akin to levying a harsher sentence on someone because of their interracial marriage in a region and time when that was legal but frowned upon. Social pressure unrelated to the issue at hand should not be relevant in court. Even if it's related to the issue at hand in the case, it should be restricted to sentencing (where it likely can't be removed anyway).
And what's wrong with that? Be upset that the FDA only approved one company to make the drug.
And it's not like anyone was hurt. Overall, insurers ended up paying a bit more (drugs are only 10-15% of US health care costs, and very few people need Daraprim). Big deal. If more people did this, then the system would get this issue addressed, maybe.
On top of that, he said he was investing the profits into researching better drugs, though of course that's not a requirement.
It came out in congressional testimony that they were completely misrepresenting how they were re-investing profits. Employees were pilfering profits with 100% raises, massive bonuses and lavish parties. Very little if anything was going back into R&D.
If you want to make a profit and drink champagne on yachts that's totally fine, just don't go around telling everyone that you're pouring those profits back into research.
True, and if it comes out that Turing knowingly blocked people from getting it despite knowing their eligibility, then he deserves derision. But so far he's just pointed out the huge issues and laughed, driving up awareness.
At some point if your system is so terribly busted and no one is fixing it, eh, maybe you lose the right to hate people abusing it. Or maybe his wit and charisma is making me blind to the issue here.
I found a rule loophole that allowed me to wear an Iron Man suit while playing in the NFL, so I made a career making millions of dollars a year. Aint I brave and admirable for pointing out the issue?
I'm getting increasingly annoyed at the culture of praising exploiters of the system instead of promoting constructive players (who are less profitable, ie less sexy). I understand that the contrarian view to "The Man" is the easiest one to take, even if I think the identified "Man" is the diametrical opposite.
Can I presume you offer your skills to anyone who asks at a wage that reflects a minimum cost of living (ie no iPhone or other luxuries the bare minimum cost of living). If not what is your reasoning beyond apparent greed?
Take a look at wealth globally, if GDP was evenly distributed every year everyone would get roughly ten thousand dollars. That's pretax, thus the total average spend per human being be in direct cash payments or via governmental programs should not exceed that number in a fair system. In western nations the poor see double that number on average in cash compensation, and more than triple that number when you include government services.
My point is fairness and accusations of greed cut both ways, if fairness was truly the concern of the poster he would also cut his standard of living in order to benefit those much worse off than him. As he more than likely does not his argument is not "let's increase fairness" but rather "people in my class and I deserve more" and that's the same argument the people raising the drug prices are making.
It seems like you are completely missing the point. This has little to do with economic inequality. The issue is not that this guy had a random product and raised its price. If this had been a car or an iPhone, we could not have cared less if he had been "greedy" and selling it for $1M/piece. The issue is that this is medicine we're talking about. People don't view healthcare and medicine like they view ordinary services and products. Many people (perhaps not you) have a much higher threshold for what kind of practice is moral/ethical/acceptable in medicine. That's why even in the middle of a battlefield people think it is inhumane to prevent doctors from treating injured soldiers, the war be damned. There is more to humanity than money.
Retrophin was a company and not a drug, right? The comment is saying things like "Retrophin isn't a widely used drug" which is really confusing me and makes me think either I or the writer (or both) don't have any idea what he's talking about. I'm trying to make sense of it compared to what I'm reading from other sources and am completely failing because of this.
The drug was called Daraprim. I think the linked comment misspoke when calling it Retrophin, but I have heard many of the same things that they are saying. Namely that anyone that cannot get the drug through insurance can get it for free. I don't think that Martin Shkreli is a good guy by any means, but portraying him as "human garbage" is not entirely fair.
I believe he reinvests 80% back into R&D. That's a pretty large sum. It's a lot more than the big companies. If a better drug for toxoplasmosis is developed that doesn't kill people, it would have been a great achievement.
Regardless of big an asshole he is based on seeing the Vice interview and thinking about the big fraud pharma industry makes me think he is actually way better than the conniving people who run big pharma.
This guy speaks out and maybe he is an asshole and suddenly everyone hates him.
The rest keep their profits to themselves and we don't seem to care or mind.
Everyone has choices to make. Martin could have easily not been an asshole to cancer patients or investors at his fund. You want to let him off the hook just because he said "yup I'm a dick" while he was making the choice to be a dick and profited massively from being a dick?
Acknowledging the fact that what you're doing is wrong does not suddenly make that thing right. It's still wrong. And you're still an asshole for doing it.
Of course we care. People are criticizing the pharma industry's practices and calling for change all the time. Shkreli is a particularly obnoxious symptom, but he's not the disease.
Because he defrauded them in order to get their 3x return.
Put simply, if I burn my house down in order to collect the insurance money, I've committed insurance fraud whether or not I pay that money back, and no amount of profit on the payback negates the illegality.
Although, interestingly, he didn't steal their money, he lost it in a bad trade, which is probably (maybe?) covered under the risks associated with the fund's operation. The deception was not telling people their money was gone (and also lying somewhat about details of the fund initially). Given that the loss was an accident that he didn't profit from, and that he worked to repay the money, there's a critical difference between your example and what's reportedly happened here, which is intent.
It's more similar to you managing a property for someone, and telling them you got fire insurance when you haven't yet, and then when the house burns down accidentally you work to make the money to cover what the insurance would have covered. You did commit fraud by not getting the insurance when you said you would, but you also covered the costs in the end.
The fraud part, which also happens to have been the illegal part, is that he misrepresented the size of the situation while soliciting investments. It might eventually have been true, but was specifically not true at the time he made the statements he made.
That said, I agree that my analogy was bad, and I wasn't trying to assert that Shkrelli deliberately set the house on fire as much as I was just looking for an appropriate analogy of something that is illegal even though it did not have any financial damages.
The point was that while damages from fraud may be financial, the fraud is the damage, and the lie is the crime.
> That said, I agree that my analogy was bad, and I wasn't trying to assert that Shkrelli deliberately set the house on fire
Yeah, I was just trying to add more information to it, and point out what I thought were interesting portions of the case. Less a rebuttal and more an clarification and addition. :)
The case itself is very interesting because the situation is very interesting, and that's only compounded by his public persona, which is reviled by many because of prior media attention.
He lied about the current status of the fund for quite a while as he attempted to replace the money, and sent fraudulent reports showing good returns when all the money was lost. He later replaced all the lost funds with profits from the company he founded (and reportedly worked hard to make profitable).
I'm not sure whether that company was the one responsible for the drug price hike, and whether that constituted a lot of the profits or that actually went back into research as I believe he said it did during that episode.
Actually, a bunch of wall street, banking, etc all said the state of the economy was fine, there was no housing bubble, etc all on national TV before the markets collapsed. None of them went to jail.
I mean, everybody came out okay - Shkreli really made his investors a lot of money! Yeah, he lied, but he did some incredible work: typical fraudsters take your money and run - he doesn't fit that mold.
Honestly, the issue was that he's an utter asshole, including to his investors. Investors are willing to put with a lot if you triple their money, but Shkreli managed to cross that line. That made him an easy target for the prescription drugs investigation and media circus.
Just because his investors made money doesn't excuse him.
Suppose you lent 10,000 to a friend and the friend promised to return it within a year. A year later, your friend doesn't pay you back and makes a bunch of excuses. Instead, he takes the 5,000 he has left to the casino, gambles it on the roulette wheel and by luck manages to turn that into 30,000 and pays you back 1.5 years later. I don't think you would be happy with that situation...
> “I asked Fred where the funds had come from, and he responded, ‘The meeting with the General Dynamics board was a bust and I knew we needed money for Monday, so I took a plane to Las Vegas and won $27,000.’ I said, ‘You mean you took our last $5,000— how could you do that?’ He shrugged his shoulders and said, ‘What difference does it make? Without the funds for the fuel companies, we couldn’t have flown anyway.’ Fred’s luck held again. It was not much, but it came at a critical time and kept us in business for another week.” [0]
Technically, Fred committed a fraud (actually I forget the technical term for the crime where you misuse funds). Its just that he wasn't prosecuted for it.
Could you be thinking of Misappropriation of funds? I'm not a lawyer and I haven't spent a lot of time looking it up but from the few places I looked it doesn't seem that it would fit.
Your analogy is slightly off... suppose you lent $10,000 to an acquaintance known for being able to double it, and they promise to return it doubled in a year. A year later you ask for your money and he gives you $6,000 from someone else he convinced to do the same thing along with $6,000 from a different venture that was taking off and $8,000 work of equity for that startup. You didn't quite get what was promised, it seems a little shady, but at least he didn't rip you off.
The problem is, in most cases, historically the type of actions Shkreli tried often ends in disaster (often done by someone intentionally being malicious, I might add).
Shkreli may have been able to work his pseudo-Ponzi-ish scheme to investors' benefit. But it is pretty easy to look up the sordid history of the vast majority of Ponzi-type schemes, to see why this type of activity is generally illegal.
You don't think intent and net harm should be considered in criminal cases? I'd like this sentencing to send a clear message to fraudsters that:
A. If you get caught, you're going to prison
But more importantly -
B. If, however, you work hard to ensure the people you defrauded are not harmed by your fraud, your sentence will be lighter than if you were the type of fraudster to cut and run.
I don't know about you, but in light of the fact that fraudsters are always going to exist, I'd like to incentivize the "benevolent fraudsters", rather than pretending (through equal sentencing) that there is no difference between the two.
I would be perfectly happy to get more than my 10,000 back (like his investors did) late vs getting less or none back ever.
I'd be joyous if the return was better than I could expect to make otherwise, say > 10-20%.
Investments are risky. They are not automatic.
What I wouldn't be happy about is if I was lied to about the risk of an investment. That is closer to what this case is about. The money gained or lost doesn't really matter.
I don't see why it's disingenuous? Investing is extremely risky, and I'm not convinced that he didn't just get lucky on the second bet.
This isn't ok because the original investor was paid off. That's also how Ponzi schemes work - the original investors are paid off (I know, here the money seems to be generated from Retrophin, but the behavior is the same).
I think that's being too results driven and doesn't take into account the risk that was taken. As another example, suppose your uber driver drove you home while intoxicated. Even if the trip ended up being fine (no accidents, smooth ride), you would still have valid justification for complaining about this.
I understand a risk was taken, but gambling has a less than 50% chance of return (by design) while buying a Pharma company that you control is conceivably less risk.
Let me add to this: Buying a company you have a government mandated monopoly on (patent) that owns a product that people will die if they don't take (inelastic demand), and has a huge barrier to entry for new, competing entrants (FDA) is conceivably less risk than throwing chips on a roulette wheel.
What if he lied to you, but then went out and through a combination of talent, hard work, and luck somehow made the money to make you whole and then some?
The law is very clear on what is a crime and what isn't. So when he misused his funds, he committed a crime. And he was prosecuted and convicted for it. Doesn't matter if in the end he cured cancer: he still committed a crime.
I have a feeling that since most people have never dealt with the justice system, they fail to appreciate just how black and white it really is. While the movies/TV do portray cases where "extenuating circumstances" help the case, most cases are pretty straightforward.
> I mean, everybody came out okay - Shkreli really made his investors a lot of money! Yeah, he lied, but he did some incredible work: typical fraudsters take your money and run - he doesn't fit that mold.
I think it's nice everyone came out okay, besides Shkreli in this case I guess. I still think what he did was wrong though because if you don't punish that kind of behavior, then you're encouraging people to do things that are wrong in the hopes they will succeed, and it won't always work out as it happened to do so here.
So, it is okay to lie to investors, as long as you eventually pull a success off? And you make those investors you were lying to money by committing fraud on the investors in your new company (Retrophin), so they make money, but not as much they would have if you weren't secretly taking profits to pay off the investors you previously defrauded?
They agreed he committed a crime not that he wasn't a "great dude." I'm not saying he is, just that this is using a claim without any evidence or response to paint a picture of his whole life.
The YouTube video of him doing an Ebay Analysis [1] was very interesting I thought, both from a technical point of view and another look at his character.
I watched a few of his early stock evaluation videos, really informative. Shkreli's a bit sociopathic, but he's wickedly smart, in his spare time he teaches himself javascript and organic chemistry.
I think I got an epiphany watching this - is this what the missus sees when I'm tapping away at a bunch of (to her) garbled text flicking between text editor tabs, webpages and CLIs
I spend a good chunk of my day in Excel and some might consider me a power user. He's pretty decent, and I picked up a couple tips from him (using a graphical line object instead of messing with cell borders for something you might need to move frequently for example).
There is definitely something mesmerizing though about watching someone conjure complex data onto a screen seemingly by magic and a few key strokes though. Although really it is just memorizing a ton of hot keys and a bunch of buried menu shortcuts.
Lots of tapping, little happening really. This is what it must be like when your horizon starts and stops with Excel, you find yourself copying numbers from a SEC PDF to do the same model for the umpteenth time.
The timing of this video is a lesson in humility. It's posted one month before a positive earnings report showing high growth in active buyers that gives the stock an ongoing 1.3x price increase. As far as I have viewed, Shkreli seems ambivalent, using vague heuristics to predict the future -- expectation of a yahoo-like slow decline, poor UX and discovery, and stiff Amazon competition.
Why not both? What he's doing, creating outrage legally, is one of the most effective ways to create positive change that actually affects the whole industry. And hes making money too! Win-win?
He committed early on to give financial aid to those that could not afford the new drug's price. His conscious is rather clean. I see it no different to what most private schools do - charge a huge sticker price then offer aid, so that everyone gets charged as much as they can afford, even if barely.
Also by increasing the cost for people with insurance, insurance eats the cost and raises the premiums for everyone. Someone definitely lost, and it was basically everyone on an insurance plan that needed those drugs
Schooling still has a minimum price that needs to be charged to be sustainable. Teachers are not cheap, among other costs. Drugs do not. Drugs are very cheap to produce after the R&D. Financial aid (price discrimination) would work rather well for drugs (but we'd all end up paying more, generally, just like higher education).
As for whether he has implemented financial aid yet, I do not know. Bear in mind that only tens of people buy this drug a year, so implementing financial aid is almost as easy as just having an email account for requests.
I agree. My initial perception of Shkreli was the commonly accepted one of revulsion and hatred. After watching the Vice piece, plus a lot of Shkreli's finance talks and live streams, I find him pretty charming and unbelievably intelligent.
"Charming and unbelievably intelligent" are definitely fair descriptors for this man, just please bear in mind that these terms probably describe many other people who are also guilty of fraud. Sure he has his side. And yes he's probably been treated unfairly by the press. And no, he isn't guilty of all of the things people say. And yet none of that makes him actually innocent.
To add, I would argue that "charming and unbelievably intelligent" are prerequisites to being a truly great fraudster.
- Charm: a lot of people don't realize this, but the "con" in "con man" is short for "confidence". They work by abusing and exploiting people's confidence in them. A con man has to have enough charm to get people to place their confidence in him, or the scheme isn't going to work.
- Intelligence: fraud isn't something you can pull off by brute strength. You need a sharp mind to plan a scheme and carry it out.
If a con man wasn't "charming and unbelievable intelligent", I'd doubt his efficacy as a con man.
And I'll also add that "charming and unbelievable intelligent" is a good way to describe a number of serial killers. Charm and intelligence doesn't a good person make.
It's funny how incredibly susceptible HN seems to be to the smooth talkers.
Yeah, I know this person is technically being charged with being a Russian double agent and committing treason, but he just seems so down to earth, relatable, and smart! Swoon!
FWIW, he claims that he gave the medicine away for free to people who could prove they couldn't afford it, so that he was really only screwing insurance companies. I believe that he was trying to draw media attention to the outrageous, legally-allowed colluding practices of the insurance and pharma industries. It would have been in his best interest to not draw attention to himself and slowly raise the price of the drug over time rather than rock the boat and put himself in the spotlight. I think this agitated a lot of the established powers in the pharma industry, but we're getting into tin hat territory now, so I'll leave it at that.
> FWIW, he claims that he gave the medicine away for free to people who could prove they couldn't afford it, so that he was really only screwing insurance companies.
Screwing insurance companies means increased costs for everyone. I'd really rather not pay 20% higher premiums every year to pad someone like Shkreli's pocketbook.
Sure, but the solution is not to wish that people like Shkreli don't raise prices on their drugs. Instead, we need to reform the US healthcare system to stop problems like this.
Many drugs of similar kind, as Shkreli would point out, have a similar price. The difference is that those drugs are owned by faceless pharmaceutical companies with PR teams. Shkreli was an obnoxious person who was doing an obnoxious thing and as a result the government swatted him with some unrelated charges (Incidentally, I thought his defense of "I didn't commit fraud, because all investors made money" was a pretty good defense).
>the solution is not to wish that people like Shkreli don't raise prices on their drugs
I can wish whatever the hell I want to wish. Just because it's legal doesn't mean it's right, and everyone here arguing that he's a good person because he's not doing anything illegal is inherently arguing that "legal" == "morally right".
No. He's still a shitty person and I can wish him the most painfully infected ingrown toenails and I will still sleep soundly at night.
I wish that people would do the right thing. I also wish Congress would fix our health care issues. I can do both, and they're both just as likely to happen. In the meantime, he deserves all the public shame in the world.
>Sure, but the solution is not to wish that people like Shkreli don't raise prices on their drugs. Instead, we need to reform the US healthcare system to stop problems like this.
The solution is both. Just because a broken system allows you to get away with being a monster doesn't justify you being a monster.
I disagree. Only one of those solves the problem. Reforming the healthcare system will (ideally) prevent harmful exploitation. Wishing will do nothing, even if it's your birthday wish.
Why did you think his defense was a good one against fraud?
He lied to people who gave him their money. That is what fraud is. The outcome does not matter.
Fraud has other components beyond just lying. For example, I could tell you that I'm Santa Claus, and, due to the rising complexity of children's toys, I need more money to hire additional elves this year, would you please donate?
That wouldn't be fraud though, because, among other things, you aren't damaged by it. You might be damaged by it if you sent me your money, and I actually used it to buy myself sugar cookies, but you didn't.
What I'm trying to get at is "harm" or "damage" is typically a component of a fraud case. In this case, the defense of "My investors didn't lose money, but actually made back multiples of their initial investment" seems very strong to me.
Shkreli had a company which failed and lost investors money. Rather than break the bad news, he lied to them, started another company, made more money, and paid back his investors. I may have the details wrong, but from this article, that was my main takeaway.
The point about damage goes to intent. Did Shkreli lie to people to take their money and make himself rich? Or did he lie to people to get a working productive business and pay off his investors? The fact that he did the latter implies his intent was the latter.
If I were an investor, I'd be upset that the initial investment failed. I'd be litigious if I realized he had lied to me. If he lied to me and returned my money with profit, I'd just stop doing business with him in the future.
Do the early investors who made money from Madoff's funds not have a fraud case against him since they made money even though it was paid out from later investors and not from the actual investments claimed?
It seems like both cases are fraud, it's just that one has a better outcome for the victim than suing and hoping it wasn't all spent on Wu-Tang albums.
Did ALL of Madoff's investors get paid off, or just the "got-in-on-the-bottom-floor" investors? If it wasn't all it's not the same argument as Shkreli's defense.
Great, then get the FDA to approve more people to make lifesaving drugs? A system where you're counting on the generosity of companies to charge low prices seems rather flawed.
Only a couple thousand people use Daraprim in the US. He claims 2/3rd of sales are to the USG at 1c per pill. So if there's 700 full price patients at $100K a course, that's an extra $70M on 3 trillion?
Companies were doing this before he did, and keep doing it now. So get the FDA to change or have a "dire needs" import rule or fix the system.
>A system where you're counting on the generosity of companies to charge low prices seems rather flawed.
Oh, it is absolutely flawed and completely corrupt. It's so corrupt it's costing lives rather than just money. I'm not saying it's happening, but I wouldn't be surprised if the FDA's mandates and budget for approval aren't somehow related to keeping profits high.
There are a lot of details that people seem to gloss over or haven't heard about. I am not sure if its to be believed or if he was just trying to repair his reputation, but he claims that jacking prices up on common drugs was to fund R&D into medicines for less common diseases where treatments are very expensive or don't exist at all. I found that to be a compelling argument because as far as I see it, at least he is (supposedly) trying to do something for these people, while others ignore them. Basically getting insurance companies to pay a lot for some drugs (even if it leads to premium hikes) will socialize the costs of developing other drugs.
>Screwing insurance companies means increased costs for everyone. I'd really rather not pay 20% higher premiums every year to pad someone like Shkreli's pocketbook.\
- Medical malpractice insurance cost (to cover punitive damages)
- FDA approval process
all increase cost for everyone, who is 'found guilty' for that?
And what do you see public institutions of educations, from public schools to taxpayer funded universities do about that in their educational curriculum? How are children and students taught to analyze the causes of 'increasing costs'?
And what are the journalists, those 'beacons of truth' are doing in that regard? Is the coverage of those legimate reasons for higher cost getting anywhere similar of attention compared to Shkreli's?
(btw, not defending Shrkeli's actions ... have not studied this in detail, just surprised at this onesided moral outrage)
If you make money on a trade, someone else is losing money. That's nothing new.
Where he went wrong is going into the healthcare space with that attitude. Shkreli thought that he didn't care about the bad PR it would bring him, but the microscope on him ended up uncovering illegal behavior.
Any time you buy, there's a counterparty selling, and vice versa. If they had not bought or sold on their end, they would have made the money rather than you.
That's all I was trying to say. Obviously this is simplistic and there are many reasons why someone might rationally be fine with being on the losing end- they might have something else better or less-risky to do with their capital, for example, or they might be a market maker that is not interested in holding anything long-term, etc.
>Screwing insurance companies means increased costs for everyone.
They already increased prices. And they've made an entire clusterfuck in terms of billing codes, bureaucracy, and negotiations before ACA anyway.
Insurance company does poorly while my health improves? My rates go up.
Insurance company does well? My rates stay steady.
I had a car insurance agent tell me this exact reason today. Their underwriters simply increased the price because the company isn't doing well.
Insurance prices can't always go up. Something is going to break. And we're all going to pay a shitload of money and have a bunch of fallout either way.
You'd rather let an entire industry continue to screw over millions of Americans out of money and access to healthcare, than let one troll and admittedly fraud profit from exposing said industry? Fair enough.
>FWIW, he claims that he gave the medicine away for free to people who could prove they couldn't afford it,
Sorry, I find it hard to take the word of someone who was convicted of committing fraud. Fraud that was committed before these claims were made. I guess defrauding his investors was also some 11th dimensional chess move designed to show the weakness of the financial industry, right?
Move over Jesus, we have a new martyr who suffers for our salvation.
Can you link to any documented cases? I searched and couldn't find any that weren't reported on by him or the company, not exactly independent sources.
Patrick Rice gets it free for life after a Reddit AMA. Google not work for you, or were you trying to stonewall the discussion with Rush Limbaugh tactics?
There's that one, very public, case. That happened after the entire ordeal blew up, and happened after shkreli had said that people got it for free if they needed it
It's not nothing, but it's not exactly impressive either
So maybe instead of saying, "Find one person who got it for free," you should have said, "Find one person who got it for free that I like even though the US has some serious medical privacy laws and therefore it's nearly impossible to find unless that sick someone (with HIV) voluntarily comes forward publicly, risking their career and future job prospects, to be on the side of a person that has been heavily vilified in the media circus."
Or find me a page on company's website that lists steps needed to qualify that are not too onerous and hopefully clear. Phone number would be appreciated too.
You know, something that looks more like a deliberate program and not a one-off.
I'm on a $10k once every three months medication, and the drug company called to offer to pay any out-of-pocket costs up to $20k/year (deductible, copay, coinsurance etc.) I might have had, regardless of income.
The med probably costs them a couple hundred dollars in manufacturing, so they're happy to pay $20k/year to get $40k/year from my insurance.
(I turned them down - I have no deductible and a $15 copay, but plenty of others aren't in that situation.)
I think it's interesting that since we can put a face and a name on that behavior, it's easy to see that if those price hikes led to someone's death, his actions were immoral or downright evil. It's easy to draw a direct line from his actions to someone else's suffering.
It's well established that what he did so wantonly happens in more hushed tones as a matter of business. The lines are blurred, we find it hard to point fingers at individuals. If Skreli's actions are immoral, so are the actions of the anonymous thousands like him. This is the textbook "banality of evil", and we can see similar consequences everywhere. This seems like classic Philosophy 101 material, is it moral to raise the cost of food when someone will starve?
Do you have evidence of this happening? Shkreli said publicly that if anyone couldn't afford his pricey drug he'd ensure that they got it. I have no idea whether he ever followed through.
How many people died directly due to Martin's actions? I'm very skeptical of your claim and found nothing to back it up after a quick Google search. The first result was a Quora answer that even said that his moves resulted in no deaths. Do you have any citations for your claim?
I would like to know more about this if you have sources, I have been following Martin Shkreli on a lot of social media for a while and by his explanations, there shouldn't be any person hurt as result of the price hike that he is famous for.
The outrageous fact that police officer pulled over drunk driver and his license got suspended for six months for DUI caused said driver to commit suicide because he couldn't get to work anymore and as a result - he couldn't support his family.
What a horrible police officer right? There is no coming back from this...
In all seriousness I have a hard time blaming investor who had all rights to raise the price of his own product for whatever the fuck reason he wanted to, in a democratic society and on the free market that USA supposed to be. And thenof course then there is EpiPen.
>I find him pretty charming and unbelievably intelligent.
Isn't that part of why people claim he is a psychopath? Smart, lack of empathy, easily gains people's trust, and charm all bang on for traits for psychopathy.
I have a hard time psychopaths are quite as… blunt, frankly.
He pumps a lot of money into medicine research. He gave away drugs for free to people who couldn't afford it. Neither seem particularly likely for a psychopath, and even if they are, then it's a psychopath having a net positive impact.
He is, largely, just a regular but intelligent asshole. I'm getting kinda tired of seeing "charismatic, smart, has money" == "psychopath" lately.
It is very common for "psychopaths" to play charming. That is one of many ways in which they manipulate others because it makes the victims lower their defenses.
What's wrong with Congress questioning someone about legal but shady activity? If he broke the law, he'd just be prosecuted. No reason for Congress to have anything to do with it. But if what he did was legal but wrong, then maybe the law should be changed, and that's exactly what Congress is for.
It doesn't inspire confidence that they questioned Shkreli, who was a relatively small player in the medical space, while a senator's daughter was in the middle of one of the most egregious price gouging schemes in recent memory. They even wrote legislation to make it mandatory to carry their product in schools and public buildings.
The Shkreli inquiry reeked of hypocrisy and grandstanding. Those congressmen knew perfectly well what was going on, and many of them receive contributions from companies involved in it.
> while a senator's daughter was in the middle of one of the most egregious price gouging schemes in recent memory.
For anyone curious, CEO of Epipen manufacturer Mylar is Heather Bresch . She is the daughter of senator Joe Manchin, who has introduced bills in the Senate to change FDA regulations to favor his daughter's company.
Not to mention that their "questioning" was not even questioning, but instead exactly what you say - grandstanding. They basically unloaded uninformed rants on him while he was forced to sit there.
Because Congress didn't need to find out any facts. They just wanted to put on a show to sway public opinion.
Remember when they questioned Toyota over unintended acceleration? That made Toyota apologize and generally made the public believe that Toyota was at fault.
Now, consider that at the time Congress questioned Toyota they were the largest shareholder in Toyota's biggest competitor (GM) and, when NASA examined the evidence, they found no issues in Toyota's products.
If you want to talk about securities fraud, that Congressional hearing should be at the top of the list.
Yes, it absolutely was a PR stunt. I mentioned earlier that congress gets paid a lot of money to not regulate pharmaceuticals, this was them trying to save face so the fleecing can continue. Just an example of absolute corruption of our federal government.
> What's wrong with Congress questioning someone about legal but shady activity?
If Congress had invited him to come testify, and he'd accepted, I would have absolutely zero problems with that. But that wasn't the situation he was in -- he was forced to attend a Congressional hearing by federal subpoena, for an action that was obviously not illegal in any way.
At the least, it was a small abuse of power in exchange for a publicity stunt. At the worst, it was unlawful detainment in an attempt to intimidate.
He tried to expose "hypocrisy" by committing fraud and pricing vital medication out of many people who need it's ability to pay? All the while acting like a complete asshole and working hard to disrupt his own trial?
How will society ever survive without this white knight's protection?
Thanks for sharing that. I've never really gotten on board the Shkreli hate wagon. I've just regarded him with a mixture of skepticism and curiosity. People love banding together and agreeing collectively about what they like and dislike. It tends to make me uneasy to get involved with that so I've tried to stay neutral in my views on him.
It exposes it. Not quite as monumental, but a Snowden moment. Remember, congress did squat about the price gouging, because that's what they get paid to do.
I wish it were a Snowden moment, but it wasn't. Analogous things are happening all the time - e.g. http://www.nytimes.com/2012/12/30/business/questcor-finds-pr... - from $40/botle to $28,000/bottle over a period of 7 years; it has, in fact gone up since, and I can't find the source right now, but in fact Questcor has also cornered the synthetic version and jacked it up as well, so everyone in the US who needs it pays >$15,000/vial ; Meanwhile, if you get it outside the US, it's still less than $100/vial anywhere in the world.
All pharma companies are supervillians, and they all corner supplies and jack prices, but they do it more quietly and usually a little slower. Shkreli just went to the endgame faster, and had a villain media portrait. But he is not any different and he definitely did not induce a Snowden moment. I wish he had.
I'm a little more hopeful that regard, perhaps misguided. Shkreli is a commonly known name because of his persona and the way the media latched on to it. It was a perfect story. Bad guy, doing bad things to sick people. Hell I even know how to spell his name and he has been in the news for quite a while.
Questcor on the other hand, I've never heard of. Not a very juicy story, and any juiciness is the result of Shkreli. Will it make a difference? There is a lot of money preventing it from making a difference, but it's about to become a political career killer to allow this to go on I believe. At the very least, it's in the public discourse.
Comparatively, Snowden's revelations hasn't really changed squat either. Maybe I shouldn't be so optimistic.
> Shkreli seems to be trying to expose this hypocrisy, but the news loves their stories.
Ahhh, my favorite pastime, exposing hypocrisy. To do this, you have to play 47 dimensional chess. My recommended strategy for this is to defraud investors and then get rich off price-jacking pharmaceuticals. It's a proven strategy!
As a Canadian, I'm just curious: what are the current proposals to regulate pharmaceutical sales in the US?
In most Canadian provinces, the provincial government is the only authorized purchaser for prescribed medication. It is then sold to pharmacies and hospitals, who are in charge of distribution. (in some provinces, such as Quebec, a mix of public or private insurance will then cover most of the purchase of medication; everyone is covered by the public plan, but your employer is mandated to get a private plan if they can)
When Shkreli says "f-- Walmart" (in the Vice interview), it's horrifying, because I know a lot of people in the US who are not covered by insurance, so they buy medication at Walmart.. This is really hard to understand.
There are no serious proposals on the table with any chance of becoming law. The ruling party believes that government should not be involved in healthcare in any way and would rather move in the direction of less regulation instead of more.
The minority party has several plans, but are still divided.
That interview changed my point of view as well. It does indeed seem like hypocrisy, and like the competing and stronger drug companies set up this publication lynch. I can't believe that out of all the strong drug companies, the first time a drug was increased in price is this poor 2015 founded company. Why is it, that the first time we hear about this common practice in drug industry it's within this relatively new company?
> It was kinda sleazy to see the congress question him about his price increases when they knew damn well it was perfectly legal and they haven't done anything to stop it
Lots of things are legal uses of taxpayer money.
Lots of things aren't illegal but are worthy of public condemnation.
The intersection of those things are EXACTLY the sorts of things I want my congress people going after.
Do you disagree, or do you just like seeing things burn?
The point is that the system should be fixed, not just "condemn" someone for abusing it. If it's legal to do something unconscionable then that legality should change.
> It was kinda sleazy to see the congress question him about his price increases when they knew damn well it was perfectly legal and they haven't done anything to stop it.
Do you have any suggestions on how what exactly they should've done? Passed a law that says "you cannot increase the price of a drug beyond 5x" or something?
I would suspect the vast majority of the cost of drugs is R&D, including the FDA approval process. They can factor that in on initial cost when they release the drug. The 10% is only for increases.
Hopefully instead of someone buying a drug that has already been released won't buy it because they can jack up the price 5000%. They would have to factor in the 10% rule when purchasing. Unfortunately this might lead to expensive release costs, but that already happens.
It might not be perfect, but 6000% increases because more yachts is a hell of a lot worse.
The only horrible person in that tweet is the rat messaging her that crap so he can write some clickbait garbage for whatever trash site he works for, tbh. Let's be real - we all say stupid shit while drunk.
Repeated, direct verbal harassment, and inciting a mob of sycophants to follow suit is patently disgusting. He may be technically competent, but he completely lacks social intelligence.
Surely he's made his money at this point - the only thing driving his behavior is narcissism.
> For some reason, recently a number of writers seem to have taken it upon themselves to salvage Martin Shkreli’s reputation. Previously, there had been a rough consensus that Shkreli, the oily, simpering pharmaceutical executive who raised the price of HIV drugs by 5000 percent before being indicted on fraud charges, was one of the most cretinous human beings alive. This seemed utterly uncontroversial, in fact so self-evident as to render debate unnecessary. [...] But a miniature genre of article has sprung up recently: the Martin Skhreli Is Not As Bad As You Think hot take. From Vanity Fair to The Washington Post to The New Yorker, authors have issued the provocative thesis that, far from being the mealy, smirking, patronizing little snot he appears to be both at a distance and up close, Shkreli is anything from a blameless cog in a vast dysfunctional apparatus to a sweet and tender do-gooder unfairly disparaged by a society too stupid and hateful to appreciate his genius.
> And the Vice profile, while questioning a number of Shkreli’s claims and containing numerous criticisms, calls Shkreli a “finance wunderkind” and “a Horatio Alger story” and sympathetically relays Shkreli’s claim that his unapologetically money-grubbing attitude is merely an exaggerated caricature that he plays for the public to entertain himself. [...] Let’s be clear: these reporters are dupes.
> One of Shkreli’s ex-girlfriends has confirmed that he is a manipulative, psychologically abusive habitual liar with zero capacity for empathy. As she explained: It soon became obvious that Martin was a pathological liar, would pretend to cheat on me and brag about it to raise his value in my eyes, so I’d always feel like I was hanging on by a thread, could be replaced, would vie for his approval and forgiveness.
> Shkreli’s ex-girlfriend also displayed screenshots of conversations in which Shkreli offered to pay her ten thousand dollars for sex, a proposition that revolted her.
> His menacing behavior has been noted elsewhere: he has been accused of waging a harassment campaign against an ex-employee, writing in an email that “I hope to see you and your four children homeless and will do whatever I can to assure this.”
So here is why it's important to take Shkreli down. Congress gets paid lots of money to not regulate pharmaceuticals. 13 democrats recently voted against a bill allowing the US to import Pharma from Canada, so it's both parties.
Congress is in hot water over the cost of prescription drugs and they need to do something, and something fast ... as long as that isn't actually reducing the cost of prescription drugs, because, you know, donors. Shkreli is the perfect mark, or scapegoat for this because he has been quite vocal. Consider he isn't the only one doing this. Many (donating) Pharma companies do this yet are quiet about it.
Anyway, if they take down Shkreli, congress looks like they are doing something, without actually doing anything. Notice they didn't take him down for his price gouging. Yes, that will continue to go on just as the donors planned. The masses are satisfied with their sacrifice. Carry on.
I appreciate that link. I haven't seen that image though. The clarification isn't that inspiring. It seems to be arguing that they do in fact take money, it just isn't quite as much as the image represents. All of them fell back on their concerns that Canadian drugs don't satisfy our "safety standards." Honestly, if it were El Salvador or something, maybe, but Canada, not so much.
"The 13 Democrats did vote against one amendment that was intended to lower drug prices through reimportation of medicines from Canada, and they have each taken money from drugmakers."
The government and media couldn't have asked for a better outcome. The actual criminals on Wall Street and in Big Pharma, who had the foresight to line the right pockets, go ignored and the outsider who drew the ire of the public - for a decidedly amoral business decision with poor optics - is very publicly castigated. It's a win all around for a monumentally corrupt establishment, which has once again deferred meaningful scrutiny.
Shkreli made the mistake of setting himself up as the perfect loudmouthed, flamboyant patsy.
I just paid for a pair of EpiPens; the generic version was $337 a pair (last I checked, the non-generic version was over $600). I have pretty good health insurance, so I didn't pay that much myself, but my employer paid the rest.
As a baseline, I had the pharmacist look up the equivalent medication for use with a syringe; a ten dose bottle was $5.99. I know, not the same thing. But this confirmed what I'd suspected for years.
I have to assume that the EpiPen delivery mechanism, which is really what we're paying for, is well debugged and optimized and essentially just a matter of ordering parts and assembling them; it would be mind boggling to have a COGs of more than a few dollars, or any significant conversion costs. The cost of the actual medication that the pens contain is apparently about sixty cents on top of that. Mylan is printing money.
Icing on the cake: The pens expire after a year. But you typically can't get pens that last that long, the ones I got already have a few months on them and will have to be replaced before the next school year ends or my son won't be able to attend class (the school is not allowed to administer "expired" medication).
This is an utter and corrupt racket. I'm writing my congressional representatives and senators. Again.
Well, they're converting IP to money. The fact that their device is delivering adrenaline is almost irrelevant. Except for the dose sensitivity and life/death context, which make it a perfect setup. Price gouging is also an issue for asthma inhalers, for the same reason.
Between the FDA and patent lawsuits, good luck doing this in the US. Several major drug companies have already failed miserably and Adrenaclick isn't anywhere near the huge success you apparently think it would be.
So are you saying it is not possible to provide an epipen equivalent at lesser price than mylan? Then what wrong are they doing again? It is literally not possible to sell the product at a lower price.
Well, Adrenaclick does exist and is cheaper, but I'll assume you meant "very hard" rather than "not possible".
It's hard because the US pharmaceuticals market is broken, something that Mylan is paying money to encourage now that they're on top. Have you read the post I linked to?
Putting people like Shkreli into prison for a long time is vital to the long term stability of society. I wish money didn't buy options to avoid prison and I wish that people with his behaviors didn't so often accrue large amounts of money.
That would be great if he wasn't one of many, and if nothing of significance will come from this ruling (it won't). He's just a convenient target that can be pointed to and said of "Look, aren't we doing our job?" when the truth is nothing will change in the long run.
I don't see anyone riling against the strongarming lobby of the big fraud pharma. This dude just seems more like a character from Big Lebowski or The Wire to me than someone say from big pharma who reaps billions by lobbying for sustaining their own monopolistic behavior....
You could say the same for almost any crime. Why should those who commit white-collar crime be allowed to continue without repercussions, whilst those who commit much smaller offences get jail time?
The problem is now Congress can sit back and do nothing for a few years regarding Pharma, since the masses and media will be satisfied with this. Nothing changes.
Correct me if I'm wrong... I thought this particular court case had very little to do with the pharmaceutical industry. Also, that's a bit of a stretch. It's not like the government has a 'white collar crime prosecutions quota', and the general public doesn't overlook wrongdoing if similar crimes have been prosecuted recently.
This case has nothing to do with the pharmaceutical industry. Shkreli is known to be the "bad boy of Pharma" and is being taken down. His reputation is based on hiking the price of his drug. This will make the federal government look like they are doing something without actually doing anything. They aren't prosecuting him for price gouging his drugs and that common practice will not stop.
He was found guilty of defrauding investors. He started a fund, lost a bunch of the money trying to make more money for himself doing unrelated things with it, and only gave it back much later by repeatedly lying to the original investors and then making some of the money back via other means (turning it into stock in a new pharma company, iirc).
It was wildly irresponsible and definitely fraudulent.
One could argue that he hurt a lot of sick people by making it very difficult or impossible for them to afford the hundreds of percent price increases he laid upon the drugs he took control over.
Edit:
[0] "... it says that the drug is available for free to people with deep financial need. But Dr. Aberg has watched her patients have to "jump through the hoops" to get it. Patients have to prove both financial need and health status, something that's difficult to focus on when their lives are in danger. In June, one of her patients gave up on the process. The patient switched therapies, only to suffer a negative side effect."
He raised the price of Daraprim in order to fund R&D to find alternative treatments as Daraprim caused some nasty side effects. It was free to any individual who wished to obtain it, with Martin footing the bill. The side effect of the price hike was the insurance companies has to pay more, not individuals. So no, one couldn't argue he hurt a lot of sick people.
>The side effect of the price hike was the insurance companies has to pay more, not individuals.
I keep seeing this, don't you realize that those increased insurance costs are passed on to the people paying for insurance?
>He raised the price of Daraprim in order to fund R&D to find alternative treatments as Daraprim caused some nasty side effects.
You shouldn't buy into his PR efforts, take a look at this:
Shkreli admitted his company sold the same form of pyrimethamine, or Daraprim, that had been on the market for 70 years — although he expressed hope that his company could develop a more potent form of the drug that did not hinder the body’s production of folic acid.
“The mechanism of the drug is folate inhibition,” Anandya reminded the CEO, adding that what Shkreli had proposed might not even be scientifically possible.
“The entire mechanism of the drug is to stop the production of folic acid in the first place and the bulk of its side effects are tied up with that,” Anandya said. “It’s kind of counter-intuitive to say that you are going to solve this problem when it’s not a problem as much as the whole raison d’etre of the drug. This I find is the main problem with your plan. That the solution is not worth $749.”
“One cannot suggest such a (monstrous) increase in the price of a drug which by your own admission does nothing better while telling me your plan is to (because this is the only way it would work) create an entirely new drug not related to pyrimethamine at all because it would require a new structure,” the physician continued. “Which in turn would give you a big hassle since you would require testing and FDA approval from scratch anyway. I think your plan is flawed.”
> It was free to any individual who wished to obtain it, with Martin footing the bill.
[0] "... it says that the drug is available for free to people with deep financial need. But Dr. Aberg has watched her patients have to "jump through the hoops" to get it. Patients have to prove both financial need and health status, something that's difficult to focus on when their lives are in danger. In June, one of her patients gave up on the process. The patient switched therapies, only to suffer a negative side effect."
So in order to save ~100% on a $100,000 treatment, they have to "jump though the hoops" and prove they need it (otherwise everyone would just do that?). OK?
It wasn't always a $100,000 treatment. Shkreli made it a $100,000 treatment with the justification being that the poor could still obtain it for free. But then he puts a bunch of beauracratic roadblocks in the way and it's their fault they don't jump through his hoops? For a pill that costs $1 outside the US and which he made $750? Come on man.
I'd imagine the roadblocks are there to prevent people abusing the system. And the rest of the roadblocks are by the FDA and perhaps CBP, right? Otherwise people could just import the $1 pills and be fine.
If it turns out Turing was acting malicious and intentionally tried to block people from getting the medication despite knowing they were eligible, that's a different story. But I'm hardly going to take the word of biased medical professionals on it.
Martin put a face to all this, pointed out a huge flaw in this system and made money doing it. Then to top it off, he dares to laugh at everyone in the system about it (like in [1]).
If Martin had just hid behind normal pharma PR, few people would be outraged, it'd just be general grousing with little airtime.
>Martin put a face to all this, pointed out a huge flaw in this system and made money doing it.
Martin did not "point out a huge flaw", he got caught exploiting a huge flaw and is narcissistic enough to believe that he could sell that exploitation as something other than it is. The sad thing is that because he's "computer nerdy" a bunch of other "computer nerdy" people have fallen for the con.
>I'd imagine the roadblocks are there to prevent people abusing the system.
He could not have roadblocks and let the drug be cheap just like it was for decades. This is on Shkreli.
>But I'm hardly going to take the word of biased medical professionals on it.
Medical professionals are biased but the guy jacking up drug prices 5000% isn't? We're taking him at face value? pfft.
Isn't this an extreme example of the core problem why the US health system is so expensive? Even you are suggesting that an increased price is fine if it's the insurance companies paying the money.
1. There is no evidence of any R&D efforts. He did "market research", i.e. finding new drugs to acquire and hike the price on.
2. It was absolutely 100% not free to any individual who wished to obtain it. If you had no insurance you might (or might not) get it for free, but if you had lousy insurance you could get stuck with a 20% copay, which means you have to pay $18,000 out of pocket -per month-. Also, hospitals stopped having Daraprim in stock because of the price hike which means people with acute cases are no longer able to start treatment immediately.
3. If you can't argue he hurt a lot of sick people, why are doctors and other healthcare professionals arguing exactly that?
I think you've been drinking the Shkreli cool-aid.
What's interesting is that people are outraged at medicine prices but nobody wants to start a company to develop new molecules and sell them at the cheap. This shows that people realize that prices much lower than current are not sustainable. There is just a lot of R&D involved. But that realization does not prevent people from bitching about it or ascribing blame to people who are just doing what is viable for their business.
To be fair, he was not convicted of that, and it's arguable whether that entailed committed a crime.
The particular crime that he was charged with and convicted of was "victimless"-ish. That is, he lied to investors, basically running a Ponzi scheme (specifically, reporting that their balance was higher than it actually was to prevent them from trying to pull out their money), but instead of the usual deal where the scheme collapses, he managed to make enough money to make his investors whole.
Is that true? He has repeatedly said that if they are paying for it directly, he will give it to them for free (or $1 or so?) -- that the prices were only for insurers. Certainly it should be easy to find people that got hurt and he denied to help, right?
Also, this is the system's fault for giving a monopoly on a product to someone. Who knows how many other medicines are out there existing purely on someone's kindhearted desire to not make money.
[0] "... it says that the drug is available for free to people with deep financial need. But Dr. Aberg has watched her patients have to "jump through the hoops" to get it. Patients have to prove both financial need and health status, something that's difficult to focus on when their lives are in danger. In June, one of her patients gave up on the process. The patient switched therapies, only to suffer a negative side effect."
Tim Horn of the Treatment Action Group and Carlos del Rio of the HIV Medicine Association, said [Shkreli's] actions were insufficient, given that patients initially treated for days at a hospital typically have to continue the treatment for weeks or months after leaving.
They said "Del Rio noted that while hospitals treat many patients initially, most are then treated at home for a couple of months, so the lower hospital price doesn’t help."
This just states that people at home, after being treated at a hospital, still need the medicine. Hospitals get 50% off, which is what your unrelated statement is about.
The medicine is a cure, you need to go through about 100 pills of it. The cost of people at home is paid by insurance. This has nothing to do with the medicine being available literally for free if you contact the company.
[0] "... it says that the drug is available for free to people with deep financial need. But Dr. Aberg has watched her patients have to "jump through the hoops" to get it. Patients have to prove both financial need and health status, something that's difficult to focus on when their lives are in danger. In June, one of her patients gave up on the process. The patient switched therapies, only to suffer a negative side effect."
I have seen videos where he explains: insurance pays for the medicine, not individuals, and people who can't afford/have insurance gets them freely from government programs/their company programs.
And who pays for insurance? (Hint: It's individuals) Shkreli is right in that by raising the prices he wasn't really gouging the sick for thousands and thousands of dollars, he was gouging all of us with insurance for some fraction of a penny. It's still wrong.
There is a reason why most international insurers will cover your health concerns everywhere in the world except the U.S. The American health system has out of control expenses that are putting immense strain on its every seam. Making distributors or insurance companies pay much more because "fuck them" (as Shkreli proudly said) only adds to a very serious problem in American healthcare.
Good, more people should do this until it breaks and reforms. And not just do it, but do it with his face and smile. Because companies have been doing this for a long time, but there's no one to direct the anger onto.
Versus what? Relying on the goodwill of pharmaceutical companies? Seeing as this has been going on for a while but there haven't been lots of airtime about it until now, I'd say Martin's on the right path.
That doesn't make my previous statement any less true.
Also, I'd suggest focusing on the wider picture. Price gouging on a single drug may have a minimal impact, but there have been numerous cases of drug companies artificially hiking prices of their products, which does make a substantial difference. There are numerous studies into this if you're interested.
I don't have much understanding of wider picture of drug prices and insurance to know it, but there certainly could be such issues. I think the comment I replied to was edited or I might have accidentally replied to wrong comment, I am not sure. On similar issue, here's Martin Shkreli proposing his own idea on this matter to keep prices down: https://www.youtube.com/watch?v=xbkz2VVUBLE
I've read plenty of reports over the last year of people who had great difficulty getting the drug, even though it was supposedly free. I posted one such article elsewhere in this thread.
1. The OP has nothing to do with the price hikes, so your argument might have been true if it was actually addressing a relevant topic
2. It's even arguable that his price hikes hurt anyone other than already rich insurance monopolies. The insurance companies would have had to cover the prices, and any people without insurance could have received the drug for free from their company. And of course the higher profits went into upgrading the drug.
You do know that insurance companies are limited to the amount that they can spend on overhead and have to return excess premiums to those that paid them? So yes, it hurt the insurance monopolies, and since they didn't have as much to spend on overhead (aka profit/bonuses) would have to raise premiums.
Also what upgraded version has been released? I haven't found any PubMed/FDA studies mentioning any improvements nor any studies funded by the company. Can you point me to some?
> It's even arguable that his price hikes hurt anyone other than already rich insurance monopolies
It is a uniquely American perspective to assume that insurance companies are some abstracted layer of infinite money that individual people needn't worry about. But then, everyone complains about insurance premiums and they wonder why they can't be lower. What irony.
"Please don't insinuate that someone hasn't read an article. "Did you even read the article? It mentions that" can be shortened to "The article mentions that.""
So if I see lots of stories by doctors who had difficulty getting their patients the drug even with this program making it available for "free" I should assume all the doctors are making that up?
Note that this does not have anything to do with his pricing of pharmaceuticals. From a different article:
"Prosecutors say Shkreli looted his drug company to pay back investors in two failed hedge funds he ran. The defense says investors got their original investments back and even made hefty profits."
In theory it had nothing to do with it, although it's not clear that the prosecution would have gone after him without that negative attention. Also, it had an effect on the juror pool.
But it seems Shkreli's transgressions are not of the "three felonies before breakfast" variety, but rather things that are indeed often prosecuted (though, it should be noted, as everyone wronged was made whole, it is likely that he would not have been prosecuted if he had not been in the media spotlight as a villain; other remarks here mentioned that the founding of Fedex had a similar fraud committed, for example).
Unfortunately Martin was made a scapegoat and they made an example out of him because of his arrogance and vocal personality. How did the executives that caused the financial crisis of 2008 get off completely free but a relatively tiny hedge fund manager get the book thrown at him? This was a witch hunt, no doubt about it.
I'd like someone to do a reading of Martin Shkreli as "satirist of neoliberalism", and suggest that the reason so many people hate him so much is that he's a scapegoat for our collective feelings of guilt. Can anyone offer a valid critique of his raising the price of Daraprim, within the frame of neoliberalism, that doesn't just reduce to "that guy's a real jerk!"?
Before we did that we'd have to agree on what neoliberalism is. One definition cited by Wikipedia is:
> Neoliberal theory argues that a free market will allow efficiency, economic growth, income distribution, and technological progress to occur. Any state intervention to encourage these phenomena will worsen economic performance.
Another is that neoliberalism is the relitigation of the New Deal.
I like the second more operational definition since it doesn't ignore history.
I first met Martin over a skype call and he was very humble—his identity online is just a brand.
2 years later, I stumbled into him again and asked him for advice on affording a cancer drug for a relative. He helped me find the charities and also introduced me to a contact at the pharma company.
Gotta love the narrative here. Jack up the medicine price and become americas most hated for a moment by general behavior.. that's fine. Make a fool of couple of hedge fund investors.. oh boy, now you fucked up
Although technically true, the title is a bit misleading. He was acquitted from 5 of the 8 counts he was convicted of. Of the 8 counts, count 7 carried the biggest wait. This was in regards to the Retrophin securities fraud accusation where he was accused of a ponzi scheme amounting to over $10M. This was the only thing that would of brought him significant jail time but he was found not guilty. Count 7 carried more wait than all the other counts combined and was the heart of the case against him. Right now the case has gone from a felony to basically a parking ticket. All the articles talking about "facing 20 years" are sensationalist nonsense. That is a theoretical maximum. He will most likely receive NO jail time and will probably just have to pay a small fee.
Of course you will not get any of this context from all the sensationalist headlines out there like "MARTIN SHKRELI FOUND GUILTY! FACING 20 YEARS PRISON SENTENCE!"...
Great. They convicted one low level autistic freak with no connections over a couple million dollars. Brave day for justice.
What about the daughter of a senator who is the CEO of the company that quadrupled the price of epipens? Yeah, right, mission accomplished, nothing to see there.
Why would this guy should go to prison when no one(except one guy in us) went to prison after the massive financial crisis in 2008?I know its naive/rhetorical question but thinking about it, its crazy to me.He did no financial harm too.
>“Rarely has a white-collar criminal defendant evoked hatred and scorn from public in the way Shkreli has. Shkreli’s willingness to lie, step on people, flaunt his wealth and look down on others made him a villain that many wanted to see go down in flames,” said James Goodnow, an attorney with Fennemore Craig, a corporate defense firm.
This attitude is just disgusting, and indicative of precisely what has gone wrong with our society. "White collar" criminals who steal millions are deserving of leniency and mercy. But the "thug" who stole $20 from a 7/11 deserves 20 years.
I find it hard to believe that he got a fair trial this time around. He was already tried and found guilty in a trial by media a few years back. This investigation & prosecution are a direct result of his legal actions that didn't play well politically. BOTH presidential candidates condemned him. To me it's sad. The sacrificial lambing of Shkreli instead of lawmakers addressing the underlying problem of costly pharma is probably the most Venezuela thing I've ever seen happen in the US. They made the system, he's just trying to prosper ffs.
Watching it right now and it's fascinating. He has just been explaining to a Daily News reporter why his company charges what it charges for the various drugs it sells. More people should watch this before they make up their mind.
It's only a live stream now, I hope it's going to stay on YT after it's done. (They're now arguing about what he considers distorted coverage of him in the press.)
Oh give me a break. The guy comes off as charasmatic in a YouTube video so you want to ignore his act of fraud? (Yes, I realize raising drug prices isn't illegal. That isn't what he was convicted for)
You know who else was charasmatic and could get people to like him in light of all his actions? Adolf Hitler.
For those who haven't read the article, Martin is being charged on cheating his investors, he himself admits to his "broomsticks", not the immoral arguments he was previously known for.
FWIW, Shkreli has said several times on his YouTube channel that he predicted he was serve 2 years and be done. From what I've heard, he'll be sentenced 3-5 and and serve 80% with good behavior. He had an excellent defense and this was probably known from the beginning.
Interestingly, I don't think he pretends that what he did was right - it just understood it was a means to an end: two years in white collar "prison" for 30-70MM when he had less than $1,000 in the bank and owed creditors north of 1MM.
I've found him to be an interesting character, a potent symbol of the greed, arrogance, and indifference of the pharmaceutical industry. A PR firm couldn't have invented a better villain, young, brash, flouting decorum by his openly fleecing the public. He was the perfect scapegoat.
I think we all know nothing has changed, and his conviction today has no relationship to his role as CEO, but I wonder if public opinion of the industry will improve, as if the bad apple is rooted out.
I have no sympathy for him as he appears to have lied to his investors and moved money around, which seems to be outside the law.
Raising the price of a drug though, as long as he can get away with it, is no crime, no matter how big the increase.
This makes me question though, did he raise the price of Daraprim so he could return money to the investors of his hedge fund?? If so, his entire defense (from his videos) of raising the price to meet his fiduciary duties to Turing's investors falls flat.
I get the impression he isn't so much malevolent in his actions, rather he behaves as a libertine and someone who takes the view that the end justify the means.
Does anyone know if they were already in the process of prosecuting him for this or is it a way to get him on something in response to him buying and hiking he prices of aids drugs, since that wasn't actually illegal.
I entered a livestream question session with this clown and asked him his opinion on CRSPR tech and he replied "It has not future because 'it doesn't work'".. Thats when I knew he was full of crap
> Prosecutors argued that Shkreli lied to investors in two hedge funds and the pharmaceutical company Retrophin, all of which he founded. Shkreli told investors he graduated from Columbia University, that his hedge fund was large and profitable, and that he had hired an auditor, they said. These were all lies, according to prosecutors.
"He lost everything in MSMB Capital after a bad trade in February 2011, and hid that fact, sending investors statements for more than a year and a half showing strong returns — even though the fund didn’t trade after that month, and had no assets."
This trial was not about him raising drug prices but rather about how he deceived investors. He lied to them and used illegal business practices to cover things up
What was morally abhorrent? Raising prices to insurers to perhaps fund other stuff, while giving away medicines to people that had no way of obtaining it (no insurance)?
If anything he should be lauded for proving how broken the medical system is (why could he so easily buy a monopoly on this product?), while not killing anyone.
I think it's fair to say that Shkreli would be left to his own devices had he not shown the audacity to charge what the market will bear. Meanwhile another person who similarly jacked up the price of a lifesaving drug beyond what many could afford, Heather Bresch, received no negative legal attention whatsoever. Ever wonder why? Because her dad is Joe Manchin. The swamp needs draining so bad.
Did I say otherwise? Is there any doubt in your mind as to why they went after him though? How many other hedge fund managers do you know of that have ever seen the inside of a jail cell?
Not why he was prosecuted. Why he was even considered for prosecution in the first place. Some of the investors "harmed" by Shkreli admitted on the stand that their investments with him were the best they've ever made. Dude is also obviously smart and talented, and while he might have bent the rules here and there, as far as I can tell no harm has come to anyone in the end. So what this amounts to is little more than a witch hunt. The "aggrieved" party has made a lot of money.
But my comment was more about a peculiar difference in the treatment of two people in similar circumstances based seemingly on whether their relatives are high ranking government officials. Surely this should have seen some more scrutiny from the "free" press, no?
Can we please have a conversation on the abuse of Federal plea bargains and insanely high sentencing guidelines? Thousands of Americans every year plead guilty in federal court to crimes they did not commit because they face insanely high prison terms if convicted. Often Federal sentences are several times longer than ones in state courts for the exact same crimes.
Wait wait wait, he committed fraud... but everyone he defrauded actually ended up getting a 3X return on their investment because he just took money from another one of his ventures?
I mean, illegal sure, but seems like he still held up his end of the bargain.
The thing about the law is that it largely exists as a deterrent for bad behavior, particularly behavior that causes systemic issues when it becomes widespread. Just because in this instance the parties being misled didn't lose their investments doesn't mean that the next time someone like Shkreli attempts this kind of scheme it won't end in disaster for the people he defrauds.
It's kind-of like a speed limit. Sure, maybe you didn't get in an accident doing 100 in a 50 but you sure as hell deserve a ticket because if everyone did it the roads would become totally unsafe.
Sure, but if you get a ticket for doing 100 in a 50 you might be out a few hundred bucks. If you hit someone while doing 100 in a 50 you'll be in jail. Outcomes still matter.
I quite like Martin. I talked to him a few time on YouTube, whilst he was live streaming.
He's whip-smart & knowledgeable. He does, however, have a couple of major flaws. 1) He trolls. Hard. 2) It seems he lies. Which I picked up from a previous news article. (He claimed to have ~$50mm under management @ his previous hedge fund. It was more like $1.6mm. Something like that).
I can forgive the trolling. It's over the top, IMO. But it is what it is.
The lying is another kettle of fish. You can't go around bullshitting ppl. &, as he found out, you can't go around bullshitting investors.
I think he loves money too much. The thought of being poor may have pushed him to do something stupid (ultimately his call!).
I hope he doesn't have too hard a time in jail. Losing his fortune (I believe he loses his shares from Retrophin. ~$65mm. That's already a punishment.
Edit: I don't know why I'm being downvoted. I'm being honest. Fuck you people, frankly.
People keep saying this as if it matters. What did you expect, that he'd be a drooling idiot? So he's smart and personable. Of course he is, most con men are.
There's this weird feeling that somehow, even though he's gouging everyone who pays for insurance at best and just the sick at worst and after being found guilty of fraud we should still like him and because why? Because he's familiar with internet culture in the same way we are? Afterall, he may be a fraudster and a gouger but he's not so bad because he's also a troller! He may be a conman but he's our conman (and intelligent!)
You didn't really rebut at all, you just googled it and pasted a link here...
I think here even Sowell would agree that it exists. Basically price gouging can't exist if we use a simplified view of a perfectly competitive market. If we move over to a market with only one seller then we could probably define price gouging as when the monopoly firm charges a price higher (or much higher) than what we would see in a competitive equilibrium. AKA exactly what Shkreli did.
Is there such thing as a perfectly competitive market irl?
There's a canonical example used by the Mises Institute -- water after a hurricane. I watch a lecture half a decade ago. I don't have perfect information. Far from it. It was convincing. A stripped down model which made gouging look ridiculous. I think it's debatable.
>Is there such thing as a perfectly competitive market irl?
Wikipedia has the requirements for a perfectly competitive market, if you look at them you'll see that there certainly can't be many markets like that. I'd say the closest thing you're liable to run into on a day to day basis is gasoline. There's a lot of stations, you probably drive past a few everyday so you've got good price information, you know what the product will be and it's all the same.
>There's a canonical example used by the Mises Institute -- water after a hurricane. I watch a lecture half a decade ago. I don't have perfect information. Far from it. It was convincing. A stripped down model which made gouging look ridiculous. I think it's debatable.
One thing I find with libertarians (Mises tipped me off) is that they're often not too familiar with good critiques, only the surface level stuff that gets thrown around on twitter or tumblr. So here's my contribution:
I'm not sure a well-known phenomenon (talented sociopaths can make excellent manipulators & get everyone to love them within five minutes of meeting) counts as armchair psychology.
Trolling is lying. Either you believe terrible things, or you lie about believing them to make people angry. Normal lying is usually intended for personal gain, trolling is just lies intended to hurt other people.
> make a deliberately offensive or provocative online post with the aim of upsetting someone or eliciting an angry response from them.
That is the correct definition of trolling, yours is wrong. It comes from the method of fishing, as in baiting people. It's about getting reaction usually by making people angry or upset. It's purpose is not to hurt other people. Although many people get butthurt over being trolled. BThat is on them. And kind of the point of trolling, "don't waste your time getting upset over shit people, esp people you don't know, do or say. Don't give them power over you". Trolling wouldn't work, if people didn't freak out over it.
Not at all, I think one of the most famous "troll" things he did was buy the master Wu-Tang album and threaten to destroy it so no one could ever hear the album.
There's no lying or anything meant to "hurt" anyone there, but you can imagine that it rubbed a lot of people the wrong way.
Threatening to destroy it so nobody else can hear it is explicitly intended to hurt people who want to hear the album. If you don't mean to hurt anyone, by definition it isn't trolling.
Maybe I'm stretching the meaning of lying, but I think it's dishonest to represent yourself as a patron of the arts, as the album was produced as a piece of art, when you're really bidding on it with the sole purpose of depriving others. If that's not the reason he bought it, then he wasn't trolling.
except, no one was actually hurt. He didn't destroy the album (as far as I know). You could make an argument that it's a dick move, and I might agree, but it's his property to do with as he wishes.
Oh so his only two flaws are trolling and he lies. But he's OK sure. How about the fact that he caused the suffering of patients needing the drug that he was raised prices on?
One thing to consider is: why is he the one who decides who can afford the drug or gets a free version? Seems horrible to me - we have laws to protect equal access to services like this (Medicare, Medicaid).
Another argument of his I found extremely disgusting is that he claims he's reinvesting profits from the price raise to further drug research. Ok, but again, we only have his word for that (and he's been convicted of fraud(!)). You can only claim you're smarter than the system and more responsible so much before people realize what's going on.
Exactly. If one does not like this particular part of the story perhaps they should write the politicians who stopped giving a shit the second the news moved on, and who seem to have accomplished nothing related to healthcare in the 2 years since.
What someone will pay & what someone will sell @. Normal basic econ.
Edit: (I can't seem to reply) I think non-gov monopolies are ok. You'd make a ton of money in your example, & then be able to create more drugs. Generally, I think it's good for talented people to get resources. Superior resource allocation.
There's nothing talented at all about buying rights to a drug and then raising the price of it. Monopolies hurt consumers, why would you think that's okay? Especially in a field like pharmaceuticals where peoples lives are literally on the line?
This isn't normal basic econ. This is a monopoly market.
Let's say I create a cure for a truly horrible disease like Huntington's. Let's say it cost me absolutely zero dollars of R&D, I just happened upon it in some weird stroke of happenstance and the FDA does a rush approval and gives me a grant for even those costs, basically fantasyworld but $0 expenditure by me so everything I make is pure profit. And let's say I bring this drug to market and I give it a very controversial price. Which is that I will cure you of Huntington's if and only if you pay me 1 million dollars or all of your worldly possessions, whichever is higher. Do you believe I should be able to do this?
also, iirc the patients that need that drug are literally low triple digits if not lower. making sure they all get it one way or another is not exactly a challenging logistics problem. imo it's more of a marvel that something so niche is available at all.
I went to high school with a fellow like Shkreli and with same story: rising fortunes, financial lying, fraud, conviction.
Same traits as above, though unlike Shkreli this guy was extremely personable and likable.
He was just a congenital liar and driven by something inside to... do more, do something bigger. He had the most incredible stories in high school that largely turned out to be lies, but at the time it all hung together with enough reality you couldn't see through it.
It's interesting knowing someone like my acquaintance and seeing the same story in other people of playing fast with lies trying to make it really big, when they actually have the skills to do it more honestly.
> He claimed to have ~$50mm under management @ his previous hedge fund. It was more like $1.6mm
The number of people who think the leverage their account gives them - and he could have easily had 20x-50x leverage - means that is money under management is surprising.
You might find that waiting a few more minutes might make readers more sympathetic to your thoughts. Often I suspect some users may downvote because they see both the impatience and the swearing at "you people" which they see as being every user except you.
Just a helpful hint. By the way, at 29 minutes, your comment was in the black and was not downvoted and was at #3. Welcome to Hacker News. I hope you enjoy your time on this technology site.
I've been around HN for a while. It went from 2 points to 0 to 1. I had already written the edit. I decided to keep it.
I probably shouldn't have. I thought it would help. I guess it shows I'm human. I don't want to come across as a psychopath. I have a tendency to stick to ideas others feel are wrong (vs actually being wrong). Actually, HN is quite good on that front. Accepting logic.
Edit: Could have lied here. Just took the downvotes.
Edit2: Which is what I just learned. Better to be disliked & be truthful. In most cases. (Would lie to someone trying to murder me, for example. Despite what Kant says).
No one has been charged with wrecking the worlds economy in 2008. Sometimes I have to wonder, is it down to who you know or who you can influence when it comes to charges. Shkreli got his comeuppance, but why a blind eye to other larger fish?
How is that "being cruel to strangers just to enjoy their suffering"?
Also, you've commented in this thread about six times now with snarky remarks, unsubstantiated vitriol, and essentially "Martin Shkreli is a monster." Whether or not there's good reason to dislike him, I think you've successfully made your point.
Ah, the #1 go to defence for terrible people when they get called out for their actions, "it's just a joke, I was just kidding, don't be so sensitive."
You are way too sensitive though. The virtue signaling is through the roof. All you're doing here is "trying to make sure a terrible person gets their comeuppance." Like really?
You've never pulled a prank in your life?
I notice you and a lot of people like you have around 100-500 karma. I wonder if it's just newbies trying to find some way of differentiating themselves. Virtue signaling is in fashion, so it makes sense.
I'm so tired of this buzzword. Why not take people at face value that they are actually expressing their own moral opinion on an issue and not assume they're doing it for "social standing"... on an anonymous internet forum.
If you're looking for other behaviour that "makes the community worse" I think you should consider your own. Starting discussions with the assumption one side's opinions aren't valid opinions and using user's comment karma as a barometer of their sincerity will lead only to flame wars.
The issue is that expressing your own moral opinion is fashionable. It's considered acceptable to hold someone else's head under water just to raise your own. And that's toxic.
Note that anyone who calls out virtue signaling soon ends up in the crosshairs. I don't mind though.
Also, they were quite serious. And that's the problem. The fact that they're serious in calling out someone as a "terrible person" (when they're not) is what makes it dangerous.
It's an internet forum. We're all expressing our own moral and general opinions. It's toxic to assume these opinions are not honestly held and write them off simply with another buzz word. The other poster didn't hold Shkreli's head under the water, his comments will not affect Martin at all. Plenty of people in this thread think he is a terrible person, you don't - that's fine, but it is still just an opinion. I don't see how that (or almost any) opinion is "dangerous" just because you disagree.
I don't know why you feel you're "in the crosshairs". You had no problem criticising the other poster, you should be able to take some criticism of your own.
It's toxic to assume these opinions are not honestly held and write them off simply with another buzz word.
You keep saying this, but nobody did that. Maybe that's where your anger is coming from. I clarified in my last comment that their opinions are honestly held, so at this point it seems like you're trying to misunderstand me.
I think you really dislike the term "virtue signaling." That's fine, but it doesn't change that that's what is happening here.
The fact that all of this stemmed from the idea that he is a terrible person for threatening to destroy an album as a joke is what makes this situation ludicrous. When the witch hunting mindset is so engrained in our culture, it becomes dangerous to those it targets.
I'm not angry at all, I'm just trying to tell you that if you're going to comment on what makes this community worse you need to consider your own behaviour.
> Since 2015, the term has become more commonly used as a pejorative characterization by commentators to criticize what they regard as the platitudinous, empty, or superficial support of certain political views"
https://en.wikipedia.org/wiki/Virtue_signalling
You can see why I would misunderstand you because this is the definition of the word as I (and obviously others) understand it. So basically saying someone's opinions are "platitudinous, empty, or superficial" is both shitty way to try to have a conversation and a way to write people's opinions off. The wikipedia also pretty nicely sums up how it has become a misused buzzword without any actual meaning, unless you're a signalling theorist.
I didn't say anything about anything beyond the fact that that's the classic defence of trolling and it's a piss poor one. Cool that you looked at my karma tho, like it means something. I've been around the block more than a few times and am generally too busy to comment on hacker news.
Also, way to use the term virtue signalling to offhandedly dismiss anyone that thinks people should treat other people with some amount of respect.
Anyway, I hope you have a good day and that you treat others the way you would like to be treated.
Edit: and yeah, I pulled a few pranks when I was like 15. They were stupid and I grew out of it once I learned that my actions affected others.
I've been around the block more than a few times and am generally too busy to comment on hacker news.
This is just another way of saying that you come around to snipe at someone and then leave. What if Martin wanted to come participate on HN? How would he feel?
Calling someone a "terrible person" for threatening to destroy an album (and then not doing it) ruins your ability to call out truly terrible people for truly terrible things.
More than that, it's rather unfortunate to jump on the train of kicking someone while they're down. What Martin did was illegal, and he'll stand for his crimes. Using this as an opportunity to grandstand just to elevate yourself isn't very classy.
No, that's my way of saying, who cares how many points I have on an internet forum and how are said points relevant to what I am saying? I glance at what's on HN in the morning and occasionally comment when something is super relevant or when I'm bored and sipping on a drink after work.
I was sniping at you and your, oh so typical, defence of trolling, but since you want to talk about Martin (are you on a first name basis or something?), he's a terrible person for waaaaay more reasons than threatening to burn an album. You wanna talk about kicking people when they're down? Let's start with jacking up the price on a drug that a good number of people with HIV need to survive, because that's kicking someone when they're down, unlike calling out a troll for being a troll. Sure, he was legally in his right to do so, but just because something is legal doesn't make it morally the right thing to do.
Thanks for reminding me why I rarely comment on things online, I have better things to do than argue with someone who sees more humanity in a troll than they do in the people he has hurt.
You don't even have your facts straight. No one went without their meds. At best he was guilty of ripping off insurance companies. And that's not a great thing to do, but you shouldn't feel great about pretending he hurt people.
It matters when you come onto HN for the sole reason of trashing on someone, especially when you hardly participate in the first place. That kind of behavior causes other people to do the same, which makes the community worse.
When fraud happens those affected don't usually get their money back much less a return on that money. However, it's pretty clear what he did is also fraud (false documents, not returning people's money when they asked for it) even if the fact that investors came out better makes the plaintiffs less sympathetic.