Ex-drug executive Shkreli hid control of shares, U.S. says

[June 04, 2016]  By David Ingram
 
 NEW YORK (Reuters) - U.S. prosecutors tacked on an additional criminal charge to their case against former drug executive Martin Shkreli on Friday, alleging that he tried to conceal from investors his control over unrestricted shares in Retrophin Inc <RTRX.O>.

Federal prosecutors in the New York City borough of Brooklyn filed a superseding indictment with eight criminal counts against Shkreli, who last year became a lightning rod for outrage over soaring prescription drug prices. He was initially indicted in December on seven counts.

Shkreli, 33, pleaded not guilty to the earlier indictment and is awaiting a possible trial this year or next.

"The new indictment adds nothing of value to the government's case that still relies on a flawed theory as to Mr. Shkreli," his lawyer Benjamin Brafman said in a statement.

According to the new indictment, in 2012 Shkreli and Retrophin's outside counsel Evan Greebel divided 2 million of the company's unrestricted shares across seven employees and contractors in such a way as to avoid the reporting requirements of federal securities law.

Shkreli and Greebel also in effect controlled the shares by preventing some of the employees and contractors from selling them but they did not disclose that control to securities regulators, the indictment says.

Greebel, who was charged in the earlier indictment and pleaded not guilty, also faces the additional charge, bringing the number of counts against him to two. A lawyer for him declined to comment.

Martin Shkreli, former CEO of Turing Pharmaceuticals LLC, appears before a House Oversight and Government Reform hearing on Capitol Hill in Washington in this file picture taken February 4, 2016. REUTERS/Joshua Roberts/Files

Last year, Shkreli sparked outrage after another company he ran, Turing Pharmaceuticals, raised the price of the drug Daraprim by more than 5,000 percent to $750 a pill.

(Editing by Chris Reese and Matthew Lewis)

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