Shkreli Faces Contempt Bid Over Lifetime Pharma Ban
The Federal Trade Commission and seven state attorneys general asked a federal judge on Tuesday to hold Martin Shkreli in civil contempt, accusing the man once nicknamed the "Pharma Bro" of flagrantly and repeatedly violating the 2022 order that bans him for life from the pharmaceutical industry.
The motion and supporting brief, running to 37 pages, were filed in the U.S. District Court for the Southern District of New York before Senior Judge Denise Cote, who issued the original ban. The co-plaintiffs are New York, California, Illinois, North Carolina, Ohio, Pennsylvania and Virginia. The FTC's vote to authorize the action was 1-0, with Chairman Andrew Ferguson recused and Commissioner Mark Meador issuing a separate statement.
According to the filing, Shkreli has traded at least 60 pharmaceutical industry stocks since leaving prison in May 2022 and has repeatedly "broadcast his opinions about the business and management of many pharmaceutical industry companies." Regulators want a fine equal to the profits he made on pharmaceutical stock trading since February 4, 2022, plus prejudgment interest, with no ability to offset losses.
What appears to hurt him most is that he did not hide. The filing quotes Shkreli telling a livestream audience, "I'm showing you how to trade and invest in biotech," and elsewhere saying he has additional accounts and does most of his trading off social media because "I know feds are watching." Authorities also cite public campaigns to short drugmakers on the prediction that their clinical trials would fail; CNN reports he posted on X on November 21, 2024 about one company's data, four days before the company said its study had failed, after which regulators say he "gloated."
The prohibition traces back to the episode that made Shkreli a symbol of corporate greed. In 2015, Turing Pharmaceuticals, which he led, raised the price of the anti-parasitic drug Daraprim from $17.50 to $750 per tablet, an increase of more than 4,000%. In January 2022, Judge Cote found that Shkreli had organized an anti-competitive scheme that protected that increase by blocking generic competition for Vyera Pharmaceuticals, ordered him to disgorge $64.6 million, and barred him from the industry for life. The Second Circuit upheld the ruling in January 2024, and the Supreme Court declined to hear his appeal that October.
Shkreli was separately convicted in 2017 of two counts of securities fraud and one count of conspiracy, sentenced to seven years in prison and released in May 2022 after serving nearly the full term. This is not the first time regulators have gone back to court over the ban: in 2023 the FTC sought contempt over his failure to pay the roughly $65 million judgment and his refusal to cooperate with an investigation into Druglike, a software company he helped form.
Daniel Guarnera, director of the FTC's Bureau of Competition, said that after a full trial the court found Shkreli's conduct drove up prescription drug costs and blocked lower-cost generics, and that "when judgment is entered by a court... defendants must fulfill their obligations." New York Attorney General Letitia James was blunter: "A court-ordered lifetime ban isn't a suggestion. Martin Shkreli has been livestreaming his pharmaceutical company trades for the world to see, in violation of the law." Meador added that a lifetime ban "is only effective if breaches are met with consequences commensurate with the seriousness of the order."
The filing also concedes a weakness: regulators say they do not currently have access to the vast majority of the evidence that would establish the extent of his misconduct, including how much he profited and whether he still owns pharmaceutical stocks. That is why the request begins with a complete accounting of his trades. Shkreli and his lawyer, Edward Paltzik, did not immediately respond to requests for comment.
The outcome will help define how far a court-ordered industry ban reaches. If trading shares and commenting on drug companies counts as "participating" in the sector, the precedent would cover investment commentary, short campaigns built on trial speculation and influencer-style stock promotion. Generic drugmakers and retail investors following his calls are the most directly exposed.
No hearing date has been announced. Judge Cote must decide two questions: whether Shkreli is in civil contempt, and what sanctions would both purge that contempt and coerce future compliance. The relief sought includes divestiture of any pharmaceutical company stock he still owns, a fine equal to his trading profits, a full accounting, and clear escalating consequences for any further violations, including additional fines and potential incarceration.