Pharma boss Martin Shkreli arrested on fraud charges
December 17, 2015, 6:51 pm

Pharmaceutical boss Martin Shkreli, who sparked outrage after hiking up the price of an established medicine, has been arrested on separate fraud charges.

He is accused of fraud relating to a drug company he previously headed, Retrophin, and a hedge fund, MSNB Capital Management, where he was a fund manager.

He is currently chief executive of Turing Pharmaceuticals.

Mr Shkreli was arrested by the FBI.

He was arrested in Manhattan, New York, accused of illegally using Retrophin assets to pay off debts after MSMB lost millions of dollars, reports Reuters news agency.

In September he was lambasted after hiking up the price of popular medicine Daraprim by 5,000% - from $13.50 to $750 - prompting unfavourable reaction on social media.

The drug treats toxoplasmosis, a parasitic affliction that affects people with compromised immune systems, and is used by Aids patients.

The move led presidential candidate Hilary Clinton to vow to tackle the problem of price gouging by pharmaceutical companies.

Analysts said that the issue had since led to volatility in pharma shares.

In November, Mr Shkreli was also made chief executive of KaloBios Pharmaceuticals. Share trading in the company was suspended on reports of Mr Shkreli`s arrest.

`Serious concerns`

The FBI`s investigation dates back at least to January, when Retrophin said it received a subpoena from prosecutors seeking information about its relationship with Shkreli.

Retrophin, which Shkreli founded in 2011, sued its former boss in August for misuse of company funds.

Retrophin`s board members chose to replace Shkreli as chief executive of the company in September 2014.

On Thursday, the company wrote in a statement: "The directors of Retrophin replaced Martin Shkreli as chief executive officer more than a year ago because of serious concerns about his conduct.

"Following his departure, the company authorised an independent investigation of Mr Shkreli`s conduct, publicly disclosed its findings, and has fully cooperated with the government investigations into Mr Shkreli."


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