Photo Martin Shkreli, second from left, and a lawyer, Evan Greebel, appeared in court on Thursday. Credit Elizabeth Williams/Associated Press The indictment of Martin Shkreli, the widely reviled head of a pharmaceutical company that secured the rights to a decades-old drug and then increased its price more than fiftyfold, was described by a F.B.I. official as the “securities fraud trifecta of lies, deceit and greed” — nothing particularly new when it comes to defrauding hedge fund investors.
What makes the case interesting is that a lawyer, Evan Greebel, has been charged as an accomplice for not protecting his corporate client that Mr. Shkreli is accused of using essentially as a personal piggy bank.
Lawyers are important players in corporate transactions, ensuring their clients comply with the rules. But when legal advice pushes over the line into enabling fraud, then a lawyer can wind up on the wrong side of the law.
Mr. Shkreli was charged with securities fraud and conspiracy for misleading investors in a hedge fund he managed about losses it suffered. As The New York Times pointed out , this aspect of the case was little more than a small-time fraud in which investors were duped into believing their investment of a few million dollars was profitable when in fact Mr. Shkreli made a series of bad stock picks — hardly the stuff of front-page headlines.
After the investors protested, he was accused of funneling the assets of a biopharmaceutical company, Retrophin, of which he was the chief executive, to pay those claims. Pulling that off required much more than fast talk because the company was publicly traded, so there were supposed to be internal controls in place to ensure proper management of its assets and a board of directors designated to watch over the enterprise.
That is where Mr. Greebel comes […]
