The “Dings” — Against Mr. Shkreli’s Honesty, Integrity And Character — Are Piling Up…

Hello and good morning, all —

This will be the open thread for trial updates/observations, for Tuesday July 11, 2017.

As many have noted in comments, the prosecution witnesses are painting a pretty consistent picture of who Martin Shkreli is — at base.

And much (most?) of that picture suggests a dishonest man, a man of low character. I am pretty sure Mr. Brafman will not be able to find 30 or so witnesses, of equal standing, to white-wash, and repaint… this portrait.

But we shall see. I do think six weeks of this is going to be devastating to his chances — especially where the whole defense seems to be “at least some people made money“.

Good luck there, team defense. And strictly speaking, character only becomes part of the case when the defense puts his “generally good” character in issue — as it clearly has, here. [I do think this sort of stuff matters to the ordinary people, in the jury box.]

The jury is thus (as a matter of law) allowed to hear evidence that would suggest (at a minimum) Mr. Shkreli ought not be believed, as to his version of these events.

Let’s see what today brings!



[U] Monday July 10, 2017: Trial Journal Open Thread

UPDATED: Hat tip to FTD — from Bloomberg, reporting today!

…Kocher also questioned Shkreli’s dual roles, handling what was left of his hedge fund clients’ money while running Retrophin.

“I am also aware that you manage both companies, which seems to be a conflict of interest if our hedge fund doesn’t benefit from Retrophin,” he wrote.

Shkreli didn’t immediately reply to Kocher’s questions and at one point rebuffed him, replying he was “busy running the company,” referring to Retrophin.

Asked by a prosecutor for his reaction to Shkreli’s delays, Kocher told jurors: “I don’t think it mattered to him. It was more about what he could get away with….”

[End, updated portion — with no word on what the morning’s cross examination of Mr. Su covered.]

The witnesses for the prosecution will continue today — with cross examination of Mr. Jackson Su by the defense up first (I believe).

Feel free to add your thoughts and links.

If I get time, after a FINRA arbitration — I may add some more filled in thoughts, on the discussion in comments to prior posts — about how FDA seems poised to regulate Turing’s (and thus Shkreli’s) “business” model (to the extent price gouging can ever be called a business model) out of existence.

We shall see. Onward, now one and all — of good will… keep it flowing in good karma, even as we get drenched here in the city of big shoulders.


Friday Trial Journal Open Thread — Prosecution Witness Caroline Stewart Eviscerating Mr. Shkreli’s “No Intent” Defense…

From the keyboard of the ever-cogent (and long term deputized “second in command”) here, at the blog — Pathophilia, then — in overnight witness testimony commentary:

…“Stewart testified that ‘the implosion of MSMB Capital was the catalyst, the genesis, that gave birth to Retrophin, the biotech company.’”

It was always my impression, my suspicion, that Shkreli founded Retrophin precisely for the purpose of raising substantial venture capital so that he could make MSMB whole and ultimately pay off his hedge-fund investors (and so they wouldn’t go to the SEC, tarnish his reputation, and make general trouble). Shkreli’s surprising new-found concern for children with muscular dystrophy was a faux-altruistic cover, IMO. The report that Shkreli was concerned that Merrill Lynch would “come after Retrophin” speaks to his concern about maintaining an all-important asset pipeline from Retrophin to MSMB and his burned investors….

…According to Caroline Stewart’s LinkedIn page, she has a JD (Rutgers, 2016), an MS in molecular and cell biology and an MS chemistry (Brandeis, 1993 and 1997), and a BA in chemistry (Columbia, 1992)….

Thanks so much Dr. Martin! And in this criminal felony trial, Count Seven is proved — by the use of any Retrophin assets — to “pay off” rich former hedge fund investors. If an arms’-length, negotiated to be fair market value benefit was not received BY Retrophin, for these payoffs (and it wasn’t, as according to some testimony — the shares just… “showed up,” years later, unbidden — testimony Mr. Brafman did not repair in any way)… then, each of Mr. Brafman’s narrative lines helps the prosecution PROVE Count Seven. That’s Condor’s take on the testimony, thus far this week. [As a final side note (with much more on this in the coming weeks) where was the disclosure in the Retrophin IPO documents filed with the SEC — that the company and Mr. Shkreli would be giving away its valuable assets, to former hedge fund investors? Right. There was no such disclosure? That’s proof of Counts Three through Six.]

In the land of witness credibility, we should all keep in mind that Ms. Stewart was clearly Mr. Shkreli’s “better” — in every way: more emotionally intelligent, smarter, better education, higher purposed, greater (verifiable record of) achievements, etc….

The jury is sure to believe her — and be offended, if Mr. Brafman starts some form of bullying “jilted love interest” line of cross-examination/ attack. She is far too good for Marty, in any event. And she clearly figured that out after just a few dinners, around town.

We are in your debt — as we are running on other matters, this Friday.

Do use this thread for remaining trial testimony updates, today.


Nothing Really “New” — Just Well-Said… More Investors On Stand Today…

I’ve been following Wonkette since at least 2002. She is snarky — and almost uniformly spot on, in her manifold writings on political matters. The Wonkster’s morning take, just like the link PathoPhilia provided us in comments last evening (but NSFW), is worth reading — for huge grins.

This morning, she quotes one bit of the transcript, a part that I haven’t seen set forth in as much detail, elsewhere in the MSM — but other than that, regular readers here will garner no new factual information. It is just good fun. [She also nicely echoes, and amplifies, the FTD dressing down of the now dormant “BLMbro” handle — both of you are clearly right about it. Ugly.]

Enjoy — as we await some real time tweeting from the pool reporters, inside the ceremonial courtroom.

Mr. Brafman’s cross-examination of Mr. Blanton (an investor) ought to continue this morning.

Condor’s Take: There may be several longish side-bars, since Mr. Brafman will have to pre-clear the emails he wants to use for impeachment with Judge Matsumoto. All of this because Mr. Brafman did not pre-clear them at the motion in liminae (pre-trial) stage. So trial narrative flow is likely to be interrupted sporadically today.

For his part, Mr. Brafman says he has to hear the witness live to decide how best to impeach him or her — but this is also a way to make the government’s case seem… disjointed, with all the side bars about emails — between Martin Shkreli and Mr. Blanton (or any other government witness/investor). [But it seems Mr. Brafman is intent on also using it to create side-shows — like asking whether this witness felt homosexuality was an abomination against God and the Bible, at the end of the day yesterday. But that issue has zero relevance to anything at all in this criminal case, for securities and wire fraud.

That is — Mr. Brafman must first convince the able judge that the witness is lying (about something germane to this case), then and only then may he introduce at least one or two emails — to confront the witness with his words. But there is no allegation that anyone thinks Mr. Shkreli is gay, so questions about the investor’s views on the matter are… patently irrelevant. And likely to appeal to juror biases.]

Staying away from irrelevant pandering, then, it is an at least marginally-lawful way for the defense to mess with the AUSAs’ “flow” and “mo jo“. . .

Now you know. [Hey — that rhymes! H/T to Pathophilia!]


End Of Day On Fifth: Court Orders Edition (Beach Postings!)…

Busy day — I suspect we will hear more investors’ testimony tomorrow. We shall see.

Here are the full text orders entered today:

[First] ORDER as to Martin Shkreli re the government’s [261] Motion for Order Limiting Extrajudicial Statements and, in addition or in the alternative, motion to semi-sequester the jury.

Mr. Shkreli and Mr. Shkreli’s counsel have agreed on the record that Mr. Shkreli will not make comments to the press regarding the case, evidence or witnesses within the courthouse or the courthouse perimeter, defined as Cadman Plaza East, Tillary Street, Adams Street, and the courthouse’s northern boundary. The court so-ordered the defendant’s agreement. As this order addresses the concern of the court and the parties that the comments regarding the case could expose the jury to prejudicial extrajudicial statements, the court denies as moot the government’s [261] letter motion, with leave to renew.

Ordered by Judge Kiyo A. Matsumoto on 7/5/2017….

[Second] ORDER as to Martin Shkreli re [263], [264] Letters dated 7/4/17.

The court will hold in abeyance its order of July 4, 2017. Should the defense wish to offer into evidence a lengthy series or set of documents, however, it shall provide the documents pre-marked with exhibit numbers to the court for in camera review, accompanied by a brief explanation of the bases for their admissibility, with sufficient time to enable the court to issue a prompt ruling and avoid lengthy sidebars.

Ordered by Judge Kiyo A. Matsumoto on 7/5/2017….

Okay — now you are up to date.


In Which Mr. Shkreli Gets His US Securities Laws Duties EXACTLY BACKWARDS…

A perhaps trivial mid-day update, but I’ll offer it while we wait — for any additional word out of Brooklyn, beyond that along with a stern admonishment, from the able Judge Matsumoto — only the standard pre-trial gag order continues in effect…. for inside the court house, and it is applicable to both sides. Though only the defense seems to have trouble understanding it.

So… as reported by local New York papers, last night, in a “live investing tutorial” on the Fourth of July, Mr. Shkreli offered an unintentional — but telling — glimpse into why he is in so much trouble. He was just populating spreadsheets when he wrote this:

...“It’s good to have investors because they scrutinize it all closely,” the 34-year-old Manhattanite wrote in chats alongside a live streamed video showing him pouring through financial statements and working on spreadsheets.

“They help you rise to the challenge of success,” he wrote….

The statement is precisely… backwards. He owes (and owed) his investors complete and candid proactive affirmative disclosures — about all material matters. That is, they are not required to go ferret it out of him, under US federal and states’ securities laws.

It is not “cat and mouse” — it is George Washington-style (cherry-tree) truth-telling, that sets the standard here.

Playing “cops and robbers” with powerful, monied investors …leads to real cops — and orange jumpsuits.

Now we know, at least in part, why you are… where you are, Mr. Shkreli.


Oral Argument — Tomorrow At 9 AM EDT: Yesterday’s Motions

I just checked PACER — after a barbecue, and fireworks on Lake Michigan — and the able Judge Matsumoto has set oral argument for first thing tomorrow (and she’s plainly peeved by the defense here):

ORDER as to Martin Shkreli re [263] Letter dated 7/4/17, belatedly and generally proferring the evidentiary bases for the admission of unidentified defense exhibits.

The tardy defense motion in limine fails to offer an explanation as to why the issues raised in the July 4 letter were not properly presented on the dates ordered by the court for motions in limine, in order to avoid delay of the trial and inconvenience to the jurors.

The wholesale attempt last week by defense counsel to offer approximately 94 emails of their client, which necessitated a side bar, should not be repeated. Accordingly, the court orders that defense counsel submit a list of the documents it seeks to admit as described in their July 4 letter, with exhibit numbers, the names of the witnesses and the specific evidentiary bases for the admission of each exhibit. The court will hear oral argument at 9:00 a.m. on July 5. Ordered by Judge Kiyo A. Matsumoto on 7/4/2017

This is about what sorts of impeachment evidence may be used, as to prosecution witnesses — but it should also include argument to help her decide on the gag and jury sequestration issues, as well. I’d expect rulings on all by mid-morning — now you know.

But to FTD’s point — we have 35 witnesses yet to go, and five more weeks. So the pace is sure to fall off — as to emerging daily gobs of salacious testimony — forensic accounting issues will begin to take the fore, in a few days, or by next week (July 10 or 12).

G’night! And…