FTC alleges Martin Shkreli violated lifetime pharma ban through stock trading and livestreams

Contempt Motion Filed Against Shkreli

The Federal Trade Commission (FTC) and attorneys general from seven states have requested a federal judge to find former pharmaceutical executive Martin Shkreli in contempt of court. This action stems from allegations that Shkreli has repeatedly violated a lifetime ban from the pharmaceutical industry, which was imposed in 2022.

Alleged Violations of the Ban

According to the FTC and the states, Shkreli has "flagrantly and repeatedly" violated the ban by trading stock in numerous drug companies and discussing the pharmaceutical industry during social media livestreams. The 2022 ban explicitly prohibits Shkreli from owning stock in pharmaceutical companies and making public statements that could influence a pharmaceutical company's business.

Background of the Ban

The lifetime ban was a result of a 2020 lawsuit filed by the FTC and the same seven states. This lawsuit concerned an "elaborate anticompetitive scheme" involving the anti-parasitic drug Daraprim, where Shkreli raised its price from $17.50 to $750 per pill and blocked generic competitors. A federal court in 2022 deemed Shkreli's conduct "egregious, deliberate, repetitive, long-running, and ultimately dangerous illegal" when issuing the injunction.

Requested Penalties

In response to the alleged violations, the FTC and the states are seeking several remedies. They want Shkreli to divest from all pharmaceutical companies and pay a fine equivalent to his profits from trading pharmaceutical company stocks. Additionally, they are asking the court to establish "clear and escalating consequences" for any future violations, including further financial penalties and potential incarceration.