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There seems to be a misconception regarding what Shkreli was found guilty of. The legal case here has very little to do with the pharmaceutical pricing controve

by jjxw 9y ago

There seems to be a misconception regarding what Shkreli was found guilty of. The legal case here has very little to do with the pharmaceutical pricing controversy - it is a separate case based on a separate hedge fund that he managed. The gist of it is that he took people's money to start a hedge fund, lied to investors that the fund was doing fine when the hedge fund went belly up, but ended up returning everyone's money plus a sizable return when his separate pharmaceutical venture went well. When fraud happens those affected don't usually get their money back much less a return on that money. However, it's pretty clear what he did is also fraud (false documents, not returning people's money when they asked for it) even if the fact that investors came out better makes the plaintiffs less sympathetic.

whipoodle 9y ago
Yeah, that is definitely fraud. Though as a fraud victim you can't really ask for a better outcome.
downandout 9y ago
>When fraud happens those affected don't usually get their money back much less a return on that money. That will be a footnote at sentencing. Federal sentencing is generally based on intended or actual loss, whichever is greater. Further, the judge is allowed to take into account intended losses from his entire course of conduct, not just the intended losses from the specific counts on which he was found guilty. In other words, the fact that his investors lost no actual money will have little bearing on his sentence. I don't know what the actual amount he took in was, but he will be sentenced for a multimillion dollar fraud scheme, and because he went to trial and lost, he'll get nowhere near the minimum. The government likes to punish people for making them expend the time and effort of a trial (in 2012, 97% of federal cases ended with a guilty plea instead of a trial [1]). He's probably looking at 5 years at best. [1] https://www.wsj.com/articles/SB10000872396390443589304577637610097206808 https://www.wsj.com/articles/SB10000872396390443589304577637...
- artursapek 9y ago
  It will be interesting to see the sentence. He definitely seems to disagree with you: https://twitter.com/SamTheManTP/status/893552820548403201 https://twitter.com/SamTheManTP/status/893552820548403201 Q: How much time do you likely face? Shkreli: Uh I'm guessing none on the short side 6 months long side
  - downandout 9y ago
    I could see that he was expecting something like that based upon his press conference outside the courthouse. I think he's in for a very rude introduction to the concept of "intended loss" and the federal sentencing system in general.
    - artursapek 9y ago
      Not claiming any knowledge on the subject, just wanted to back up suggestions of his expectations with evidence. We'll see what happens. Personally I'm rooting for him, I think he's misunderstood.
      - gaadd33 9y ago
        I'm curious, what part of his message is misunderstood to you?
        artursapek 9y ago
        I just think he's generally misunderstood and undeservedly hated. While I don't dispute he committed crimes and should be punished for that, it's compounded with his existing bad reputation over the completely legal and unremarkable Retrophin move. There's been a massive smear campaign against him and he has been unjustly dragged through the mud over that. Granted his social awkwardness and attention seeking threw a lot of fuel on that fire, so he's partially at fault for encouraging it. But if you look past those immature antics he's a smart and productive member of society. It would be a shame, in my opinion, if he winds up in prison for several years. I think a fairer sentence would be a big fine and parole.
bsder 9y ago
This problem was that the fraud wasn't big enough that he had powerful enough people in his pocket. If you owe the bank $1 million, the bank owns you. If you owe the bank $1 billion, you own the bank. They only convict the Martin Shkreli's and the Martha Stewart's. The people with real money are completely safe.
emodendroket 9y ago
Well, that's true, but the article seems to suggest that his brash persona/public conduct made it hard for him to win the case.
- austenallred 9y ago
  In a jury trial that would absolutely sway things
  - charlesdm 9y ago
    Which, all things considering, is ridiculous. People shouldn't be able to be convicted because they're assholes (even if they are). I don't live in the US, but being convicted by a "jury of your peers" is frankly, ridiculous. When has the average person been able to grasp complex matters relating to say, securities fraud? Most people aren't even able to stay out of debt. A panel of judges with specialised experience often makes a lot more sense than a jury. Edit: and for those voting me down, at least explain why you don't agree.
    - dclowd9901 9y ago
      Except, of course, this has a natural side-effect of incentivizing people to not be assholes.
    - deleted 9y ago
      [deleted]
    - JackFr 9y ago
      > People shouldn't be able to be convicted because they're assholes (even if they are). He wasn't convicted because he was an asshole. He was convicted because he broke the law. I think the fact that he was acquitted on 2 of the 5 counts is evidence that the jury made a determination based on facts, rather than their feeling towards him. That being said, in a trial in the US, the judge applies the law, and the jury determines the facts, especially as they pertain to the credibility of testimony. If the defendant is an outrageous asshole, it's possibly more likely that the jury would interpret inconclusive evidence less favorably. I don't think that's necessarily the worst thing in the world, and it's also not clear that a panel of judges wouldn't be subject to similar biases.
deleted 9y ago
[deleted]
bdcravens 9y ago
Similar to OJ's recent parole that had nothing to do with the murder he was accused of committing. MSM, the previous victim's families, etc, seem to be conflating the two.
- CobrastanJorji 9y ago
  That's different, though. The goal of a parole suitability hearing is to determine whether an inmate poses an unreasonable risk of danger to society if released from prison. A data point like "this prisoner murdered some people" is very relevant to that determination.
  - vkou 9y ago
    OJ's parole was fair, and done by the book. OJ's sentencing for the armed robbery (30 years - his friends who brought the guns, and had a number of prior felonies all got probation) unfairly reflected his murder trial. The judge and jury were almost certainly out to get him.
    - throwawayjava 9y ago
      > armed robbery (30 years... his friends... all got probation Those are both extremely inappropriate, tbf...
  - artursapek 9y ago
    Not that I think OJ is innocent, but that can't be treated as a "data point"; based on public record he did not murder anyone.
    - nerfhammer 9y ago
      He was found liable for causing wrongful deaths.
      - evgen 9y ago
        In a civil trial, not a criminal one. Big, big difference.
dragonwriter 9y ago
> When fraud happens those affected don't usually get their money back much less a return on that money. He defrauded and stole money from the investors in the pharma company to repay the people he defrauded and stole money from in the hedge funds. The one set of victims getting a return only happened by stealing returns belonging to the other set of victims. > However, it's pretty clear what he did is also fraud (false documents, not returning people's money when they asked for it) even if the fact that investors came out better makes the plaintiffs less sympathetic. Criminal cases have separate prosecution and victims, but not plaintiffs. It's the victims (well, one of two sets of them) that are potentially less sympathetic for the reason you describe.
- oh_sigh 9y ago
  > He defrauded and stole money from the investors in the pharma company to repay the people he defrauded and stole money from in the hedge funds. The one set of victims getting a return only happened by stealing returns belonging to the other set of victims. That is not at all what I read. It seemed like he personally made a lot of money from his pharma business, and used that to repay the investors of the fund? Can you please source your statement?
  - awl130 9y ago
    I agree, in fact the article specifically states that he was not found guilty of defrauding investors in his pharma business.
jabgrabdthrow 9y ago
Is this "fake news"?
- thomasfoster96 9y ago
  No. OP is pointing out that because Shkreli initially became infamous for his drug price raising, many members of the public are probably seeing ‘Shkreli found guilty’ and assuming it was because of that incident, which many felt was wrong and immoral. This article (And other coverage of the trial) doesn’t make any such claim.
cm2187 9y ago
In the financial service industry there is very little tolerance for fraud. Fraud with or without losing money will get people in trouble. A trader with a massive unauthorised position is as likely to be sanctioned if this position has a positive P&L than if it is a loss.
mouzogu 9y ago
Did he make the investors their money back (plus a return) by vastly increasing the price of a drug(s)? That seems to me morally evil and also very suspect. Although I'm sure the rigidity of the legal system would not allow this kind of inference to be made or pursued legally. It would just seem to me as a legal/pharma layman that basically a bunch of sick people got screwed so that some investors (gamblers imo) could get their money back.
EdgarVerona 9y ago
True. It'd be like robbing a bank, using the money from that robbery to, say, start up a successful business, and then discreetly give the money and interest back. Money taken on false pretenses, regardless of what you end up doing with it or if you end up getting lucky and being able to pay it back, is still a crime.
aagha 9y ago
Absolutely right. Sadly, though: Screw folks by raising the cost of a life-saving drug by 5000%, business as usual. Screw over investors, go to jail.

by jjxw 9y ago

whipoodle 9y ago

Yeah, that is definitely fraud. Though as a fraud victim you can't really ask for a better outcome.

downandout 9y ago

>When fraud happens those affected don't usually get their money back much less a return on that money. That will be a footnote at sentencing. Federal sentencing is generally based on intended or actual loss, whichever is greater. Further, the judge is allowed to take into account intended losses from his entire course of conduct, not just the intended losses from the specific counts on which he was found guilty. In other words, the fact that his investors lost no actual money will have little bearing on his sentence. I don't know what the actual amount he took in was, but he will be sentenced for a multimillion dollar fraud scheme, and because he went to trial and lost, he'll get nowhere near the minimum. The government likes to punish people for making them expend the time and effort of a trial (in 2012, 97% of federal cases ended with a guilty plea instead of a trial [1]). He's probably looking at 5 years at best. [1] https://www.wsj.com/articles/SB10000872396390443589304577637610097206808 https://www.wsj.com/articles/SB10000872396390443589304577637...

artursapek 9y ago
It will be interesting to see the sentence. He definitely seems to disagree with you: https://twitter.com/SamTheManTP/status/893552820548403201 https://twitter.com/SamTheManTP/status/893552820548403201 Q: How much time do you likely face? Shkreli: Uh I'm guessing none on the short side 6 months long side
- downandout 9y ago
  I could see that he was expecting something like that based upon his press conference outside the courthouse. I think he's in for a very rude introduction to the concept of "intended loss" and the federal sentencing system in general.
  - artursapek 9y ago
    Not claiming any knowledge on the subject, just wanted to back up suggestions of his expectations with evidence. We'll see what happens. Personally I'm rooting for him, I think he's misunderstood.
    - gaadd33 9y ago
      I'm curious, what part of his message is misunderstood to you?
      - artursapek 9y ago
        I just think he's generally misunderstood and undeservedly hated. While I don't dispute he committed crimes and should be punished for that, it's compounded with his existing bad reputation over the completely legal and unremarkable Retrophin move. There's been a massive smear campaign against him and he has been unjustly dragged through the mud over that. Granted his social awkwardness and attention seeking threw a lot of fuel on that fire, so he's partially at fault for encouraging it. But if you look past those immature antics he's a smart and productive member of society. It would be a shame, in my opinion, if he winds up in prison for several years. I think a fairer sentence would be a big fine and parole.

bsder 9y ago

This problem was that the fraud wasn't big enough that he had powerful enough people in his pocket. If you owe the bank $1 million, the bank owns you. If you owe the bank $1 billion, you own the bank. They only convict the Martin Shkreli's and the Martha Stewart's. The people with real money are completely safe.

emodendroket 9y ago

Well, that's true, but the article seems to suggest that his brash persona/public conduct made it hard for him to win the case.

austenallred 9y ago
In a jury trial that would absolutely sway things
- charlesdm 9y ago
  Which, all things considering, is ridiculous. People shouldn't be able to be convicted because they're assholes (even if they are). I don't live in the US, but being convicted by a "jury of your peers" is frankly, ridiculous. When has the average person been able to grasp complex matters relating to say, securities fraud? Most people aren't even able to stay out of debt. A panel of judges with specialised experience often makes a lot more sense than a jury. Edit: and for those voting me down, at least explain why you don't agree.
  - dclowd9901 9y ago
    Except, of course, this has a natural side-effect of incentivizing people to not be assholes.
  - deleted 9y ago
    [deleted]
  - JackFr 9y ago
    > People shouldn't be able to be convicted because they're assholes (even if they are). He wasn't convicted because he was an asshole. He was convicted because he broke the law. I think the fact that he was acquitted on 2 of the 5 counts is evidence that the jury made a determination based on facts, rather than their feeling towards him. That being said, in a trial in the US, the judge applies the law, and the jury determines the facts, especially as they pertain to the credibility of testimony. If the defendant is an outrageous asshole, it's possibly more likely that the jury would interpret inconclusive evidence less favorably. I don't think that's necessarily the worst thing in the world, and it's also not clear that a panel of judges wouldn't be subject to similar biases.

deleted 9y ago

[deleted]

bdcravens 9y ago

Similar to OJ's recent parole that had nothing to do with the murder he was accused of committing. MSM, the previous victim's families, etc, seem to be conflating the two.

CobrastanJorji 9y ago
That's different, though. The goal of a parole suitability hearing is to determine whether an inmate poses an unreasonable risk of danger to society if released from prison. A data point like "this prisoner murdered some people" is very relevant to that determination.
- vkou 9y ago
  OJ's parole was fair, and done by the book. OJ's sentencing for the armed robbery (30 years - his friends who brought the guns, and had a number of prior felonies all got probation) unfairly reflected his murder trial. The judge and jury were almost certainly out to get him.
  - throwawayjava 9y ago
    > armed robbery (30 years... his friends... all got probation Those are both extremely inappropriate, tbf...
- artursapek 9y ago
  Not that I think OJ is innocent, but that can't be treated as a "data point"; based on public record he did not murder anyone.
  - nerfhammer 9y ago
    He was found liable for causing wrongful deaths.
    - evgen 9y ago
      In a civil trial, not a criminal one. Big, big difference.

dragonwriter 9y ago

> When fraud happens those affected don't usually get their money back much less a return on that money. He defrauded and stole money from the investors in the pharma company to repay the people he defrauded and stole money from in the hedge funds. The one set of victims getting a return only happened by stealing returns belonging to the other set of victims. > However, it's pretty clear what he did is also fraud (false documents, not returning people's money when they asked for it) even if the fact that investors came out better makes the plaintiffs less sympathetic. Criminal cases have separate prosecution and victims, but not plaintiffs. It's the victims (well, one of two sets of them) that are potentially less sympathetic for the reason you describe.

oh_sigh 9y ago
> He defrauded and stole money from the investors in the pharma company to repay the people he defrauded and stole money from in the hedge funds. The one set of victims getting a return only happened by stealing returns belonging to the other set of victims. That is not at all what I read. It seemed like he personally made a lot of money from his pharma business, and used that to repay the investors of the fund? Can you please source your statement?
- awl130 9y ago
  I agree, in fact the article specifically states that he was not found guilty of defrauding investors in his pharma business.

jabgrabdthrow 9y ago

Is this "fake news"?

thomasfoster96 9y ago
No. OP is pointing out that because Shkreli initially became infamous for his drug price raising, many members of the public are probably seeing ‘Shkreli found guilty’ and assuming it was because of that incident, which many felt was wrong and immoral. This article (And other coverage of the trial) doesn’t make any such claim.

cm2187 9y ago

In the financial service industry there is very little tolerance for fraud. Fraud with or without losing money will get people in trouble. A trader with a massive unauthorised position is as likely to be sanctioned if this position has a positive P&L than if it is a loss.

mouzogu 9y ago

Did he make the investors their money back (plus a return) by vastly increasing the price of a drug(s)? That seems to me morally evil and also very suspect. Although I'm sure the rigidity of the legal system would not allow this kind of inference to be made or pursued legally. It would just seem to me as a legal/pharma layman that basically a bunch of sick people got screwed so that some investors (gamblers imo) could get their money back.

EdgarVerona 9y ago

True. It'd be like robbing a bank, using the money from that robbery to, say, start up a successful business, and then discreetly give the money and interest back. Money taken on false pretenses, regardless of what you end up doing with it or if you end up getting lucky and being able to pay it back, is still a crime.

aagha 9y ago

Absolutely right. Sadly, though: Screw folks by raising the cost of a life-saving drug by 5000%, business as usual. Screw over investors, go to jail.