An Honest Question: What Role Should 18 USC § 3553(a) “General Deterrence” Play In Mr. Shkreli’s (CEO) Sentencing?

I saw this Forbes piece, as a link, through one of Christie Smythe’s tweets. Just full disclosure there. Smile.

I think it is painfully clear that she is thinking (and likely already writing up a draft chapter or two?) about the “shall consider” requirements of the lead in to 18 USC § 3553(a), or “general deterrence” — as it applies to Marty’s circumstances.

Here’s the Forbes bit — commenting on the Silk Road life sentence (murder for hire was alleged — thus a life sentence):

[Several] recent cases have starkly demonstrated, courts can and do consider a defendant’s level of notoriety as a factor weighing in favor of harsher punishment.

The ability of courts to take publicity into account at sentencing traces back to Section 3553(a) of Title 18, United States Code, which provides a list of factors that district courts are required to consider in imposing sentence, including “the nature and circumstances of the offense and the history and characteristics of the defendant.”  One of the factors district courts must consider is “the need for the sentence imposed — to afford adequate deterrence to criminal conduct.

Courts have long interpreted this provision of Section 3553(a) to require consideration of both the need for “specific deterrence” as well as the need for “general deterrence.”  As U.S. District Judge Jack B. Weinstein recently wrote, “specific deterrence” is the extent to which a sentence will “persuade [the] defendant to resist further criminal behavior,” while “[t]he theory of general deterrence is that imposing a penalty on one person will demonstrate to others the costs of committing a crime, thus discouraging criminal behavior” in the community….

We should note that in numerous pre- and post- verdict media interviews (many linked here in comments), Mr. Shkreli had been almost uniformly dismissive of (and occasionally expressed his open contempt for) the legitimacy of the court, of the prosecution… and most tellingly, the purpose of the federal criminal laws under which he has  been ultimately convicted — thrice.

Feel free to offer your opinions — let’s discuss whether it is fair, or just to the convicted felon, to have to pay in years to serve as an example, to others who might travel his path —  and whether we think others will actually be deterred from the sorts of criminal financial frauds Mr. Shkreli committed,  by a long sentence here (in sharp contrast to his “zero to six months” at a club fed facility predictions), and whether we would like to see changes in the law the sentencing guidelines.

In doing so, please do take adequate notice (per the banner over this post) of the fact that society has a particularly keen interest in ensuring and incentivizing the honesty of public company CEOs the entire notion of our capital markets requires that public company CEOs be scrupulously honest, and above reproach. [Many of the frauds they might decide to engineer, especially in private and alone, likely cannot be uncovered using normal forensic methods, so we must rely on their complete honesty, for the markets to function efficiently.] Note also that Marty was one  a public company CEO of at least two companies; not just a private hedge fund trader (i.e., a pirate rules guy).

Please understand I think several aspects of the guidelines, including this “notoriety” one tend to work random and harsh penalties with at least some convicted felons. I am no fan.

But I am also keenly interested in accurately predicting Marty’s sentence. In this regard, I will note that he will likely have served almost a half year in relatively harsh conditions (i.e., not club fed) by the time he hears his sentence on the actual felonies of which he was convicted.

Will being over four months stuck in a can — somewhere even he says is “to be avoided— going to have meaningfully changed his attitude and demeanor come mid-January 2018?

And even if so, shouldn’t he still be sentenced to what the guidelines require?

The comment box is open now — feel free! Please accept, one and all, that some commenters will wish to tell us how unfair the system is. Please accept that I agree with them, in large part.

Let’s get all opinions out on the table… and please do try to back your opinions with logical arguments… rather than invective. Thanks!





11 thoughts on “An Honest Question: What Role Should 18 USC § 3553(a) “General Deterrence” Play In Mr. Shkreli’s (CEO) Sentencing?

  1. R West says:

    I think Shkreli will eventually end up hating prison … hasn’t been in long enough. Like Kluger said, worst part is that there is no one intelligent and educated to talk to except the sex offenders. How long can one enjoy teaching illiterate people to read … once the novelty wears off it’s like work?

    Liked by 1 person

  2. R West says:

    Official Prison Name: Brooklyn Metropolitan Detention Center
    Prison Code: BRO
    Prison Type: Metropolitan Detention Center
    Region: Northeast Region
    State: New York

    So many weird coincidences … at first I thought the BRO had something to do with the Pharma Bro!

    Liked by 1 person

  3. R. West says:

    I forgot to program in the autism/asperger’s at sentencing. According to some sources, that might warrant a reduction in sentence. Need to see what the psych eval shows. (Probably shows he’s egotistical with excessive need for attention.) Usually, however, when people get a break they acted on impulse. All the emails and other evidence indicate all his frauds were carefully planned. More likely he gets the enhancement in sentencing for “sophisticated means.” So bottom line, bet the psych eval doesn’t help much!

    Liked by 1 person

  4. aldt440 says:

    Honestly, I think Shkreli should get 2 years give or take. Max for count 8 is 5 and he made some effort to pay it back so maybe cut it in half to 2. Restitution should also be an important part of his conviction if he has any money left.

    On another note… You guys believe everything you are being told? You don’t believe that there is systemic fraud taking place in the market or that Shkreli is just a comical distraction? Here’s an important question: How does the DOJ plan to deter systemic fraud? Systemic fraud is a much bigger priority than Shkreli.

    I just read this Bloomberg article a few minutes ago and I’m completely shocked. It says Alpahbet 3Q paid clicks are up 47% hahahah Who doesn’t have an add blocker on their browser these days? Somebody had to sign off on these public statements!

    Amazon is in violation of just about every antitrust statute there is.

    Does this chart look normal to you guys?

    Liked by 1 person

  5. R. West says:

    There’s also another policy issue at work. Courts can’t handle that many complex trials. If the defendant looks like they are headed to a near-certain conviction, Judges really want them to plead guilty. Once Shkreli/Greebel (via their attorneys) raise every possible defense … file every possible motion …object to every question … and cause the Judge to work nights and weekends … they are taking a big risk the Judge is going to stick it to them at sentencing!

    Liked by 1 person

  6. R. West says:

    “GENERAL DETERRENCE” is pretty important in securities law … faith in the markets is keystone of capitalism. Fact he was dealing with a public security and he was a CEO holds a lot of sway … that’s why Count 8 conviction is important even though max. sentence is 5 years on conspiracy. Plus factor in: he was connected to several frauds; E.D. of NY is probably harsher in sentencing than S.D.; did not plea bargain; and Judge has historic record of moderate: If he was squeaky clean … probably two years. But series of frauds … three convictions … one involving public security … then committed another uncharged federal crime after conviction that sent him to jail … a good guess is 6 to 8 years!

    Liked by 2 people

  7. aldt440 says:


    That’s a loaded question.

    The Forbes article is extremely well written junk.

    So Shkreli gains notoriety for contesting the charges against him and now AUSAs want to administer retributive punishment for the attention his case has received? The public is supposed to participate in the legal process! We live in a constitutional republic that is for the people by the people! The media cited constitutional rights and fourth estate principles regarding reporting on voir dire, but Shkreli gets penalized? I could go a lot further on this.

    Brian Jacobs is evoking the spirit of a famed philosopher named Immanuel Kant, whom modern penologists have largely dismissed as Draconian. His ideologies have largely been superseded by the famed criminologist Franz von Liszt. In my opinion, Shkreli’s case is now touching on subjects that Michael Foucault addressed in Discipline and Punish: the Birth of the Prison, New York: Random House. (1975)

    Jacob’s article is very crafty and meticulously adheres to his agenda. It’s heartwarming that he starts out with ‘equality under the law.’ I think ‘the rule of law’ would have been a better choice, but that would have broadened the scope of his article and stimulated thought further -something he definitely doesn’t want to do. He then jumps right into citing a controversial case and makes a moot point; notoriety is an unimportant issue in a murder for hire case! He then conveniently overlooks the legislative intent of Section 3553(a) of Title 18 U.S.C. and carefully omits the other elements of the statute from his argument.

    The entire premise of the article is laughable! Deterrence???? Indicting Clinton Bribes Inc. for treason might have a deterrent effect on corruption, but I doubt that most financial managers even pay attention to Shkreli’s poor business acumen or his rap album. Let’s be honest, I think Shkreli understands the basic concepts of managing a company, but he is shockingly bad at it in practice and everybody knows it.

    I wish you were right about society taking a keen interest in ensuring and incentivizing the honesty of public company CEOs, but I don’t see any signs. Sarbanes Oxley was the last major step in the right direction and it is never enforced. The SEC needs to take a more proactive approach.

    Regarding accurately predicting his sentence, I can’t figure it out. Trust me, I’ve spent hundreds of hours trying.

    I’ve posted before and provided numerous statistics that the prison system doesn’t work. Flogging to improve morale is a bad practice.

    I’m sorry, but the AUSAs are trying to turn this case into something it is not. Bad facts yield bad results.

    Liked by 1 person

  8. bmartinmd says:

    Obviously it’s hard to know what the judge is thinking or will consider at the time of sentencing. But we certainly know that, at present, she is not inclined to be terribly lenient when it comes to Martin Shkreli and his notorious antics.

    I think a related question re sentencing is To what extent does harsh sentencing send a message to Shkreli’s alleged or would-be co-conspirators? Shkreli can only do so much corporate harm on his own. The Retrophin case clearly illustrates that he MUST have confederates — either in the possible form of legal counsel (adjudication pending, of course) and/or in the form of morally challenged millennial cronies — to conduct his white-collar felonies and other dubious acts.

    So would the judge want to send a strong message, not so much to society at large, but to others close to Shkreli, especially young (or young-ish) adults? A message that says, “Straighten up, fly right, and stay away from Martin Shkreli, or you might find yourself incarcerated someday, too.”

    Liked by 1 person

    • FTD says:

      When she receives letters or evidence that Martin has been not taking his jail term seriously and jokingly threatening others with “braining” She’s going to throw the book at him and Martin will just keep his head down & wish he wasn’t a fool (again). What can you say if you are a jackass at a detention center? I’ve never heard of somebody messing up this much. NYC federal Court system won’t care if you are a first time offender, you are disrespecting the system.

      This sentence is going to be harsh, some of these letters are going to retreived & read by the prosecution, to the judge. That’s my unprofessional analysis. 🙂

      Liked by 1 person

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