Ahh… what the heck — I’ll just post this, as is tonight. I’m too tired to polish it. Forgive minor typos, etc. I wrote in in comments below, earlier tonight — and it makes a general point, about the lack of effectiveness of Mr. Brafman’s continual whining about the investors not having lost money (though we will later learn that some clearly did). This will also serve as “the open thread” for the second full day (Day Two) of government witnesses’ testimony, in the prosecution’s case in chief…
Billy — I want to address this (Brafman notion) in particular
, in a future post — and I will [just a little too fried (tired) to line it all out right now, and create a snappy graphic!]… Judge Matsumoto has ruled, in pre-trial orders, that Mr. Brafman cannot argue the “no ultimate harm” doctrine here.
She so ruled because the charges he’s been indicted on (at least three of them, by my reckoning) are not the sort that, in the Second Circuit, may be defended away/out by saying there was “no loss of money” by investors. Quite the contrary — the prosecution is likely to be able to instruct the jury that even though Ms. Hassan made money, in the end… the jury may not use that as (subsequent) proof of lack of intent to defraud, on the part of Mr. Shkreli. All that is relevant, under the charged counts three, six and (of course!) eight — is whether he told the truth when he solicited Ms. Hassan for the investment. He did not. See page 38 through 40, of the able judge’s opinion, from over the weekend.
Mr. Shkreli is specifically charged with selling (Ms. Hassan, among others) both fund shares, and later, Retrophin shares (in satisfaction of the the failed hedge fund(s)) — to investors while openly lying about past performance. To be able to assert “lack of intent/and no lost money” — the original solicitation of the investor funds must at least have originally been completely truthful. None of these were. At least, Mr. Brafman (I believe) will be unable to present any direct evidence that the sales/solicitations were completely truthful (absent Mr. Shkreli taking the stand — i.e., not happening).
So: Brafman — lots of sound and fury; Shkreli — clad in orange shortly, anyway.