Brooklyn Boro

Retrophin board member testifies that Shkreli lied to his face during his trial

July 12, 2017 By Rob Abruzzese, Legal Editor Brooklyn Daily Eagle
Former Turing Pharmaceuticals CEO Martin Shkreli, left, with his attorney Benjamin Brafman. AP Photo/Seth Wenig
Share this:

One of the founding board members of Martin Shkreli’s drug company Retrophin testified against the “Pharma Bro” in federal court on Wednesday claiming that Shkreli lied to his face prior to the company outing him as CEO during the fall of 2014.

“He’s lying to my face,” said Steve Richardson, a founding board member of Retrophin, when he recalled a conversation the two had in September 2014. Richardson said it was the final straw that led to Shkreli being asked to leave the company.

Richardson recalled Skhreli’s responded to his ouster, “He basically said, ‘It’s a weak board, I can get rid of you when I need to.’”

The government has accused Shkreli of defrauding investors of his company MSMB Capital Management and hiding loses by using his other company, Retrophin, to pay back investors using stolen money.

Shkreli showed up to court on Wednesday wearing tan pants, a wrinkled grey sports coat and a disheveled white button down shirt. While waiting for the trial to start, he deliberately stirred his coffee while staring off into the distance. Throughout the trial, he could often be seen smirking.

Federal prosecutors spent Wednesday morning cross-examining Richardson to get his side of the story. Richardson explained that he began seeing signs of wrongdoing by Shkreli during the summer of 2014.

“That’s when there were cracks starting to emerge,” Richardson said.

Richardson explained that toward the end of March 2014, he was asked to testify in front of the SEC regarding MSMB and was assured by Shkreli that the investigation had nothing to do with Retrophin. However, at this meeting, Richardson testified, Retrophin did come up, along with a Merrill Lynch investigation that he was unaware of.

By June of that year, Retrophin’s board of directors approached Shkreli because there were, Richardson said, “two or three things that had happened that were concerning to the board.” The primary concern was Retrophin’s business development group, which had been investing shareholder money, according to Richardson.

When Richardson questioned Shkreli in September of that year regarding a conversation they had in June, that’s when Richardson said Shkreli lied to his face.

Richardson explained that the company was weary of how investors would respond to the CEO being removed so they had hoped that Shkreli would stay on as a senior strategic consultant and as a board member.

After Shkreli was sending “mixed messages,” according to Richardson, he did finally agree to step down and let Stephen Aselage take over as CEO.

“Martin agreed to resign, we agreed to sell him two drugs that he wanted to kick-start his new company,” Richardson said.

Richardson said that he stepped down as Retrophin’s chair of the board of directors in March 2015. He said that Shkreli reached out to him after he left the company via email and asked if they could rekindle their friendship. Richardson said he had no further contact with Shkreli after that.

Shkreli became known as the “Pharma Bro” in 2015 when his drug company Turing Pharmaceuticals raised the price of the HIV drug Daraprim from $13.50 to $750 a pill in 2015.

Earlier in the trial, Judge Kiyo Matsumoto ordered Shkreli to stop talking to the media in and around the courthouse to avoid tainting the jury pool. Shkreli’s lawyers assured her he would, although he has continued to talk about the trial via Facebook Live.


Leave a Comment

Leave a Comment