Pharma Bad Boy Martin Shkreli Arrested

(RTTNews) - Drug company chief executive Martin Shkreli has been arrested by the FBI on charges of securities fraud at his former hedge fund and a pharmaceutical company that he formerly headed. Shkreli had ignited a firestorm earlier this year for significantly raising the price of a life-saving drug.

The 32-year-old Shkreli is currently chief executive officer of Turing Pharmaceuticals AG and KaloBios Pharmaceuticals Inc. (KBIO).

His arrest is reportedly linked to a securities fraud probe during his tenure as manager of the now-defunct hedge fund MSMB Capital Management and as CEO of biopharmaceutical company Retrophin Inc (RTRX). The charges are not related to drug price gouging.

According to reports, prosecutors in Brooklyn have charged Shkreli for illegally taking stock from Retrophin and using it to pay off debts at his hedge fund. Shkreli was eventually ousted from Retrophin in October 2014 and later sued by the firm.

Retrophin had filed a $65 million lawsuit against Shkreli in August 2015, claiming he breached his duty of loyalty to the company in a long-running dispute over his use of company funds, and alleging that he committed stock-trading irregularities as well as other violations of securities rules.

In September this year, Shkreli gained notoriety after Turing obtained the manufacturing license for anti-parasite tablet Daraprim and raised its price more than 50-fold. The sharp price increase and Shkreli's refusal to back down sparked growing outrage.

In late November, an investor group led by Shkreli acquired a 70 percent stake in KaloBios after the biotech company had earlier said it was running out of cash and would wind down its operations. Shkreli was named the new CEO of the company.

Shares of KaloBios plunged more than 50 percent in pre-market trades on Thursday before being halted.