- U.S. questions E*Trade account used to secure his freedom
- Lawyer's orders on talking to the press: You want me? Zip it
Martin Shkreli’s wealth may not be all that it seems. As for his mouth, it will be closed for a while, his lawyer said.
The assets the former drug executive pledged to make bail in a securities fraud case have fallen so far in value that he may need to put up more to stay out of jail, a prosecutor said Wednesday. Shkreli used an E*Trade Financial Corp. account, once valued at $45 million, to secure his $5 million bail. Most of that account was stock of KaloBios Pharmaceuticals Inc., Assistant U.S. Attorney Winston Paes said during a court hearing.
The drugmaker, formerly led by Shkreli, sought bankruptcy protection from creditors following his arrest in December. The shares plunged to $2.03 from a high of $45.82 in November.
The value of his account has "dropped quite significantly," to between $4 million and $5 million, Paes said during the brief court appearance before a federal judge in Brooklyn. Paes said the government may seek more assets as security for the bond.
During the routine hearing before U.S. District Judge Kiyo Matsumoto, Shkreli appeared with his new team of lawyers, led by Benjamin Brafman, a defense attorney who helped get rapper Sean “Diddy” Combs acquitted of gun and bribery charges in 2001. Shkreli had announced he was changing his counsel during an interview Tuesday on the Fox Business Network.
Brafman told the judge he didn’t think there would be "an issue" over his client’s bail.
Outside the courthouse after the hearing, he told reporters that Shkreli, who has granted multiple news media interviews, will not be speaking further to the press.
"One of the conditions of my engagement was from henceforth he does not speak with any member of the press at all until the criminal charges are resolved," Brafman told reporters.
Shkreli, who became infamous last year for raising the price of a rare drug by more than 5,000 percent, is accused of using one of his biotechnology companies as a piggy bank to pay off investors who lost money in hedge funds he ran. He has pleaded not guilty.
In the weeks following his Dec. 17 arrest, Shkreli parted ways with a spokesman and took matters into his own hands, granting lengthy interviews to Vanity Fair and Vice, publicly feuding with the rapper Ghostface Killah and calling for “haters” to challenge him on live-streamed online chats.
On Thursday, a panel of the U.S. House of Representatives will hold a hearing on drug pricing at which Shkreli has been directed to appear. The 32-year-old former biotech star, outspoken on social media, has mocked lawmakers on Twitter for demanding his presence before the panel. Citing the criminal charges against him, and ongoing regulatory probes, he has said he would plead the Fifth Amendment to avoid testifying.
Although the terms of the bail package were amended to allow Shkreli to attend the committee hearing in Washington, he has so far not filed any travel documentation with the court.
"We’ll know by tomorrow about D.C.," Brafman told Matsumoto.
On Monday, Shkreli tweeted: "Anything fun to do in D.C.? Asking for a friend."
The case is U.S. v. Shkreli et al, 1:15-cr-00637, U.S. District Court, Eastern District of New York (Brooklyn).