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Biotech Company Retrophin Fired CEO Because of Stock Irregularities

Martin Shkreli in New York in 2011
Martin Shkreli in New York in 2011Photograph by Paul Taggart/Bloomberg

On Wednesday, I wrote about the abrupt ouster of biotech company chief Martin Shkreli, a former short seller who took the ultimate long position—starting Retrophin, a publicly traded drug manufacturer. At Bloomberg Businessweek, we’ve taken a special interest in the precocious Shkreli, 31. We’ve wondered whether, after years of betting on biotech stocks to fall, he’d undergone a conversion or was using his knowledge to game the field.

Now I’ve got some specifics on why Retrophin’s board of directors unceremoniously dumped the executive on Tuesday. According to people familiar with the company, the board concluded that Shkreli had committed stock-trading irregularities and other violations of securities rules. The violations included grants of Retrophin stock to certain recipients in the absence of a shareholder-approved distribution plan, failures to disclose stock grants, and grants of stock above limits imposed by the plan that was eventually put in place, the people said. Shkreli has not returned phone messages seeking comment.