Posted by on July 6, 2017 4:23 pm
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Categories: Benjamin Brafman Biotechnology Business Economy Finance Hedge fund Lauren Duca Law Martin Shkreli money Reuters Securities and Exchange Commission Shkreli Testimony Turing Pharmaceuticals Twitter U.S. Securities and Exchange Commission

Benjamin Brafman, attorney for former Turing Pharmaceuticals CEO Martin Shkreli has based Shkreli’s defense on the notion that, while his client may have misled investors in hedge funds and pharmaceutical companies that he controlled, most of them made money thanks to Shkreli’s business acument and investing prowess.

Even Sarah Hassan, a witness for the prosecution, admitted as much when she testified that Shkreli paid her back with $400,000 in cash, plus shares in Retrophin, a biotech company founded by Shkreli – though Shkreli’s repeated evasions felt like “a betrayal.”

And on Wednesday, testimony from another witness supported Brafman’s assertion: Darren Blanton, a Dallas-based biotechnology investor, told the jury that, although Shkreli lied to him repeatedly about his investing track record and the amount of capital he managed, the former pharma entrepreneur helped him make millions in profits.

Here’s Reuters:

Darren Blanton, a Dallas-based biotechnology investor who appeared in Brooklyn federal court as a witness for U.S. prosecutors, told jurors he invested in Shkreli’s hedge fund MSMB Capital after being told the fund was managing $35 million in assets and had an independent auditor.

He said he later learned both of those claims were false and found Shkreli evasive when he tried to get some of his money back. Blanton said he eventually filed a whistleblower complaint with the U.S. Securities and Exchange Commission.

Under cross-examination by Shkreli’s lawyer, Benjamin Brafman, Blanton conceded that despite his misgivings, his $1.25 million investment with Shkreli paid off, largely through an agreement in which Shkreli gave him shares in his drug company Retrophin Inc.”

Blanton said he still holds 150,000 shares of Retrophin, a biotech company that Shkreli co-founded ad briefly ran before being pushed out by the board. Blanton’s stake is worth nearly $3 million at Wednesday’s closing price of $19.83 per share.

And – in an admission that’s sure to tug at the jury’s heartstrings – Blanton said Shkreli founded Retrophin after learning that a friend of Blanton’s had lost a son to a rare disease, myotubular myopathy, and vowed to find a cure. Brafman’s cross-examination is expected to continue Thursday.

Shkreli, 34, gained notoriety in 2015 when he raised the price of a life-saving drug by 5,000 percent as CEO of Turing Pharmaceuticals, sparking outrage among patients and US lawmakers and leading the press to brand him “the most hated man in America.” Shkreli has since embraced the role of provocateur, reveling in the negative publicity. His Twitter harassment of freelance journalist Lauren Duca led to him being banned from the social media platform, according to Reuters.

Federal prosecutors on Monday asked judge Kiyo Matsumoto for a gag order to prevent Shkreli from speaking with the press, claiming that he risks tainting jurors’ opinions by waging his own publicity campaign independent of the advice of his defense counsel. The request came after Shkreli lambasted the prosecution as incompetent and “junior varisty” during an impromptu conference with reporters.

The prosecution is alleging that, though Shkreli went to great lengths to ensure that all the investors in his fund were made whole, he still committed fraud by looting money from Retrophin to pay them back. Shkreli’s trial is expected to last between four and six weeks.

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