Shkreli Resigns as Turing CEO After Arrest on Securities Fraud

Will Martin Shkreli Opt for a Trial?
  • Chairman Ron Tilles appointed as interim chief executive
  • 32-year-old Shkreli has denied wrongdoing in securities case

Martin Shkreli resigned as chief executive officer of Turing Pharmaceuticals AG following his arrest Thursday on securities fraud charges.

Shkreli will be replaced on an interim basis by Chairman Ron Tilles, Turing said Friday in a statement. 

“We wish to thank Martin for helping us build Turing Pharmaceuticals into the dynamic research focused company it is today, and wish him the best in his future endeavors,” Tilles said.

Shkreli, 32, denied wrongdoing after he was arrested Thursday and then freed on a $5 million bond. The charges are related to his actions before he founded Turing this year. He’s accused of repeatedly losing money for investors and lying to them about it, as well as illegally taking assets from one of his companies to pay off debtors in another.

“Shkreli essentially ran his company like a Ponzi scheme where he used each subsequent company to pay off defrauded investors from the prior company,” Brooklyn U.S. Attorney Robert Capers said at a press conference.

Evan Greebel, a New York lawyer who was alleged in the federal indictment to have helped Shkreli in his schemes, was also arrested and charged. Like Shkreli, he pleaded not guilty and was freed on a $1 million bond.

Price Hike

At closely held Turing, Shkreli became notorious for acquiring an anti-parasitic drug, Daraprim, and raising its price 55-fold -- to $750 a pill from $13.50. That move drew the opprobrium of Congress, doctors and presidential candidates.

In a statement, Turing said the leadership change would have no effect on the availability of Daraprim. 

“Turing assures health-care providers and patients that Daraprim remains available and is unaffected by these events,” the company said in the e-mailed statement. The drugmaker has started to expand its distribution arrangements to ensure that patients have easy access to the drug, it said.

Last month, Shkreli acquired a majority stake in publicly traded drugmaker KaloBios Pharmaceuticals Inc. and became CEO of that company too. After his early-morning arrest, KaloBios shares fell 53 percent on Thursday before trading was halted. It hasn’t resumed trading. KaloBios is also represented by Painter.

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