This morning Martin Shkreli, the unofficial spokesperson of wealthy people everywhere who get rich off the poor, was sentenced to seven years in prison by a Brooklyn judge. In a lengthy preamble to the sentence, Judge Kiyo Matsumoto spoke of Shkreli’s abusive childhood and the letters she received as testament to Shkreli’s character. “Even though acts of kindess may not entail extraordinary sacrifice, they do provide basis for variance,” Matsumoto said. But, she admitted, the minimum sentence would not be enough to deter Shkreli.
But during today’s sentencing, even Shkreli’s lawyer admitted to sometimes wanting to punch his client in the face, but argued his “outspokenness” shouldn’t be held against him, advocating for a sentence of 18 months maximum.
Shkreli broke down in tears during his final statement. “Please give me a chance to show what I am capable of,” he said. “This is my fault.”
During the proceedings last week, the defense read letters from Shkreli’s supporters, including one who used the former hedge fund manager’s cat “Trashy” as an indication of his softer, caring core. And the 34-year-old expressed some rare—if hollow—humility, writing in a letter to Matsumo in which he declared himself a “fool” who had learned a “very painful lesson.”
The prosecution had recommended Shkreli be jailed for 15 years for his defrauding of investors in a pair of hedge funds he managed. The disgraced hedge fund tycoon Raj Rajarantam, sentenced to 11 years for a massive insider trading scheme in 2011, is widely understood to have received the harshest punishment for similar white-collar crimes.
In a time when our country’s super-rich antagonists bear an uncanny resemblance to comic book bad guys, and in a year, 2015, when the evils of the pharmaceutical industry were being condemned by commentators and presidential candidates, the rodent-faced former executive happened to express a particularly visceral combination of hubris and disdain. He’s so reviled that during jury selection, more than 200 jurors were excused from the trial. “I’m aware of the defendant and I hate him,” said one. “He disrespected the Wu-Tang Clan,” noted another.
But Shkreli isn’t being thrown in time-out for increasing the price of a drug used by AIDs and cancer patients from $13 to $750 overnight. And even as the charges brought against him were for securities fraud and conspiracy, that’s not exactly why he’s going to jail, either. Both those offenses are committed all the time, by guys in overstuffed suits with decades of greed and cover-up on Shkreli.
Prosecutors used the former boy wonder’s lack of remorse and disrespect for the law (say, like calling members of Congress imbeciles on Twitter) as the central argument for what is considered, in a legal system embarrassingly terrible at holding executives to account, to be a long sentence. In other words, he’s going to jail for being an asshole, and because he’s been shouting about what most men in his industry would do if they could, and because he’s alienated the invisible hands that usually let executives get away with this shit.
Shkreli’s spoiled, bro-inflected evil is equal parts Wall Street and Reddit troll. In 2015, when he broke national news for imposing a 5,000 percent markup on Daraprim, a drug on the World Health Organization’s List of Essential Medicines, he was tweeting photos of hedge fund excesses like $1,000 wine labels and helicopter rides. “At this price,” he told CBS, the drug would create “a reasonable profit.”
When Matt Novak at Gizmodo reached out to Shkreli last fall for comment on his bizzare, gross Facebook post about acquiring a follicle of Hillary Clinton’s hair, he asked Novak if he was a recent college grad who was “woke” and liberal.” “Do you have trouble paying rent?” he asked Novak.
But before he gleefully outed himself as the man who’d purchased the sole copy of a $2 million Wu-Tang album (and had an aide listen to it on his behalf), before he perp-walked in a gray hoodie and harassed journalists and became the surrogate for every petulant mercenary in America’s pharmaceutical industry, he was just a nice, boyish upstart with ruffled hair. Business columnists admired him for his “courage.” And it wasn’t so long ago—just six years—that Shkreli appeared on the Forbes 30 Under 30 list, a blazer-sporting activist investors battling “billionaires” and “entrenched drug industry executives.”
Those entrenched executives—like some of the guys over at Valeant, one of whom testified alongside Shkreli in a Congressional hearing about price-gouging—often end up just fine, their Shkreli-like hustle softened by more sober conventions and extensive business connections. While Shkreli’s operation (basically a guy with a Twitter account and some cash) is easy to go after, real pharmaceutical giants are too massive to topple.
Where Shkreli raised the price of Daraprim, Valeant price-gouged hundreds of drugs, marking them up by more than half as it aggressively took over the market. In 2015, reports emerged that Valeant had set up a phantom mail-order pharmacy, called Philador, a major factor in its massive growth, which changed generic prescriptions and pushed its own high-priced drugs on patients. Valeant employees who worked for both companies were allegedly given fakes names like “Peter Parker” to obscure their involvement.
The angular, silver-haired hedge fund giant Bill Ackman, one of the company’s largest investors, repeatedly assured shareholders of the business model viability. In the eventual shake-down, Valeant’s CEO was pushed out by the board, Valeant and Ackman settled an insider trading lawsuit for $290 million, and two less senior executives—Garry Tanner and Andrew Davenport—pleaded not guilty to fraud charges in late 2017. Their cases have yet to go to court.
Meanwhile, Shkreli is going back to jail today—sweetly, having lost the Wu-Tang album and a rare Picasso, among $7.3 million in assets—where he will in all likelihood continue to assure reporters he’s still making money, miraculously. In less visible news, the pudgy ousted CEO of Valeant is arbitrating outside of court, claiming he’s owed three million shares of the company he helped drive into the ground, at the expensive of sick people. There have been no federal changes in how price-gouging is dealt with, since he and Shkreli testified to Congress.