Here is the full PDF file complaint at law, as amended — and filed in the federal courts in San Jose, California Friday — to set out Mr. Shkreli’s highly-likely personal liability here.
It was refiled, so that the plaintiffs there could more completely pursue Mr. Shkreli personally, now that the outcome of his felony trial is known.
All the other formerly named civil defendants have paid up, and settled out — but not so, the 3X felony convict, at right. And so, we won’t cross post it in the Humanigen review blog, at all. It is not that public company’s issue, any longer.
I’ll quote just a bit, here:
…Between September 2009 and September 2014, he engaged in extensive fraudulent and illegal misconduct at these companies by, inter alia, stealing hundreds of thousands of dollars from MSMB; fraudulently inducing investments in MSMB by deceiving investors as to its insufficient liquidity and as to his own abysmal track record as a hedge fund manager; lying to large investors in stating MSMB’s assets under management as $35 million when they were only $700 and by identifying as MSMB’s independent auditor and administrator firms that had never been hired; deceiving MSMB’s broker by misrepresenting that he had located shares sufficient to cover a failed short sale, when he had not done so, leading to the broker closing at a loss of $7 million; working with his lawyer (who was later indicted) to defraud Retrophin into settling MSMB debts and personal debts, including through use of MSMB settlement agreements disguised as sham Retrophin consulting agreements; working with his lawyer and corrupt employees to fabricate investments by MSMB in Retrophin through concealed stock transfers and backdated agreements; and working with his lawyer to hide settlements with defrauded MSMB and Elea Capital investors as sham consulting agreements with Retrophin, for which Retrophin paid consideration but received no services….
…Investors [in KaloBios] lacked any real visibility into Defendant Shkreli’s personal financial resources and his ability (or lack thereof) to fund any business ventures. Indeed, his public statements and actions falsely conveyed a greater personal wealth and liquidity than he actually possessed, both before and during the Class Period. Yet, the testimony given at his trial and the degree to which Shkreli had to resort to one fraud upon another to pay off liabilities, evidence that his lacked the resources necessary to stave off KaloBios’s bankruptcy and fund its operations, including necessary clinical trials for its drug candidates….
Obviously, this too is “relevant conduct,” under the federal sentencing guidelines. Do take note, Mr. Brafman:
At least ten… it will be.