Sat. Feb 4th, 2023
Martin Shkreli leaves a federal court in New York.
Enlarge / Martin Shkreli leaves a federal court in New York.

In 2009, at a cocktail party in an apartment in New York’s East Village, Steven Richardson met one Martin Shkreli; soon after, Richardson invested $400,000 in Shkreli’s bustling MSMB hedge funds. While federal prosecutors allege that Shkreli defrauded investors of those funds, including Richardson, the two came close. Richardson, now 63 and a seasoned former American Express executive, described himself as Shkreli’s “personal mentor.”

In his testimony in a federal court in Brooklyn Wednesday, things certainly got personal — from awkward Twitter usage to sexually charged emails and Shkreli’s dental hygiene.

Shkreli, now 34 and infamous for drug price hikes, faces eight charges of securities and bank fraud. Federal prosecutors allege Shkreli hid millions in MSMB losses from vagrant trafficking, which he covered up by looting the pharmaceutical company he founded in 2011, Retrophin. Richardson would become chairman of the pharmaceutical company’s board of directors.

Once a close advisor to Shkreli, Richardson said he slowly realized Shkreli was lying to him — plus his apprentice was being investigated by the Securities and Exchange Commission and being sued by Merrill Lynch for MSMB debt. At one point in his testimony, Richardson recalled how the Retrophin board discovered in early 2014 that Shkreli was overseeing a group of Retrophin associates trading with funds from Retrophin investors, operating as an internal hedge fund. The board told Shkreli to limit that activity, but Richardson claimed Shkreli went ahead and even set up a commission structure for the trade employees. When Richardson confronted Shkreli about it in the summer of 2014, Shkreli denied it.

“I was stunned, absolutely stunned,” said Richardson NYT coverage of the testimony. “He’s lying to my face.”

Thin and soft skin?

It was a turning point for Shkreli and Richardson – the beginning of the end of Shkreli’s time with Retrophin and their close friendship.

Before that, Richardson Shkreli not only gave professional advice, but also personal advice on matters such as clothing and hygiene. Under Richardson’s influence, Shkreli switched to overnight stays in hotels instead of sleeping in a sleeping bag at the office and skipping his teeth.

Richardson also wrote him stern emails about how to improve his behavior, including on Twitter. Richardson said Shkreli revealed information on the social media platform that the company was not ready to announce, which made the board uncomfortable. Richardson warned him to cut it out and shape it. (Shkreli was later banned from Twitter for harassing a journalist.)

But other emails were much softer, almost romantic. Richardson, who is gay and in a partnership, admitted that in a 2010 email he wrote to Shkreli “only if I can touch your soft skin,” and on another occasion encouraged Shkreli to take a bubble bath. to take. about a rash Shkreli had on his neck and ears, Richardson said. But in his testimony, he also said Shkreli made sexually charged remarks and seemed insincere when he “said homosexual things,” including interest in a “hook up” with a waiter or office worker.

“I felt to some extent that maybe he said those things to me more because he thought I’d want to hear them,” Richardson said.

Shkreli’s deceptive behavior — romantic or otherwise — lasted his entire time at Retrophin, according to Richardson. In September 2014, the problems had piled up and the board fired him. When Richardson broke the news, he said Shkreli responded by saying, “I’ll beat you to build a new company, and I’ll reach a billion dollars before you can.”

On his way out, Shkreli attempted to take Retrophin servers and files, forcing the board to revoke his access.

Shkreli founded Turing Pharmaceuticals in February 2015, which later acquired the rights to Daraprim, an antiparasitic drug. Shkreli infamously raised the price of that drug by more than 5,000 percent in September 2015.

Richardson, who resigned from Retrophin and now works as a consultant, said his initial $400,000 investment in MSMB had been converted into stock in Retrophin, which is now worth $1.9 million.

By akfire1

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