The fascinating legal argument at the heart of the Martin Shkreli ‘Pharma Bro’ trial

Not much Martin Shkreli has done the past two weeks has helped him in a trial that could put him behind bars for 20 years for eight counts of securities and wire fraud.

He was personally rebuked by the judge for speaking to reporters about his case inside the Brooklyn courthouse and on the streets outside where jurors could potentially hear him. He has mocked prosecutors on a live stream on his Facebook page and called them a “junior varsity” team to news outlets. One day, he strolled into a room filled with reporters and made light of a witness who had just testified against him.

And yet, despite the antics and his attorneys’ acknowledging that Shkreli is an “odd duck,” legal experts say the flamboyant former hedge fund manager is putting on a novel defense that may resonate with jurors.

At the heart of his team’s legal argument is this question: Is his alleged wrongdoing worth a criminal conviction if his investors did not lose money?

Shkreli — who is often called “Pharma Bro” on social media — became infamous for increasing the price of a vital drug used by AIDS patients by 5,000 percent and then publicly lamenting that he didn’t raise it more. But federal authorities say they arrested him because he also lied to his investors about how he was using their cash. None of those investors, however, lost money. Some even made a big profit, largely because Shkreli’s bet on a biopharmaceutical start-up paid off.

If he gets off, it would be an embarrassing loss for federal prosecutors struggling to prove that they can put away prominent Wall Street figures.

“If Shkreli is acquitted, jaws will drop. Given the time, taxpayer money and resources devoted to this case, a defense win would be a huge embarrassment for prosecutors,” said James Goodnow, an attorney with Fennemore Craig, a corporate defense firm.

He added that a defeat could make “prosecutors gun-shy about pursing other high-profile cases,” at least in the short term.


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