- Martin Shkreli’s lawyer quoted Lady Gaga, twice, in opening arguments.
- A prosecutor said Shkreli pretended to be a Wall Street genius.
- The trial is expected to last up to six weeks.
Martin Shkreli’s securities fraud trial finally began Wednesday, featuring an explosive opening argument by his high-powered lawyer who suggested that while the “pharma bro” might be crazy, he’s definitely innocent of the charges.
“Maybe he’s just nuts, but that doesn’t legally make him guilty,” proclaimed Shkreli’s attorney, Benjamin Brafman, during a spell-binding, emotionally wrought speech in Brooklyn, New York, federal court that, among other things, quoted Lady Gaga twice.
“Will you find him strange? Yes. Will you find him weird? Yes!” Brafman told jurors, who also heard him say, “Martin Shkreli is brilliant beyond words.”
Brafman’s tour de force came after federal prosecutor G. Karthik Srinivasan said the 34-year-old Shkreli in 2009 began orchestrating a series of four separate frauds.
Srinivasan said Shkreli lured and retained investors into two hedge funds he ran, MSMB Capital and MSMB Healthcare, “by convincing them he was a Wall Street genius.”
“In reality, he was just a con man,” the prosecutor said.
Shkreli then lied, and lied, and lied some more to hide his ongoing losses of investors’ money from bad trades, including a failed short trade that left one of his funds $7 million in the red, and then continued lying as he used money and stock looted from his drug company Retrophin to repay them, Srinivasan said.
“All told the defendant stole more than $10 million from Retrophin and its shareholders,” Srinivasan said of Shkreli, who is charged with eight criminal counts of conspiracy to commit securities and wire fraud, as well as securities fraud.
But Brafman portrayed Shkreli as a self-educated scientific boy wonder who slept nights in a sleeping bag in his office as he worked to develop a cure for a deadly disease afflicting children, while at the same time making millions of dollars for his investors.
Brafman said that contrary to the government’s suggestions, the investors in the MSMB funds not only got their original investment amount back, but often much more.
The attorney also depicted Shkreli as an “odd duck” prone to wearing furry bunny slippers and a stethoscope around the corporate offices while serving as CEO of Retrophin.
Brafman said Shkreli was bullied and called names behind his back by co-workers as well as Retrophin board members who eventually ousted him because he didn’t look or act like a conventional CEO.
Shkreli’s colleagues made fun of him among themselves, calling him “Rain Man” because they believed he was autistic, and challenging his sexuality by suggesting he was gay or bisexual, Brafman said.
“As Lady Gaga said, he was born this way,” Brafman said, referring to Shkreli’s often awkward nature. “You wanna call him names? Call him names. Just don’t call him guilty. ‘Cause he’s not guilty.”
Shkreli, sitting at the defense table, sometimes nodded in agreement with Brafman’s broad defense of him and with the lawyer’s attack on expected witnesses against him.
The lawyer said that all of the people who placed their money with Shkreli’s funds were sophisticated investors, or had top-notch financial advisors, and were “high rollers” who wanted to exploit Shkreli’s genius to make big returns.
Brafman also said that the many consulting agreements and settlement deals that Shkreli cut, which the government claims were used to cover up his looting of Retrophin, were signed off by the corporation’s board and lawyers.
Brafman suggested that Retrophin board members and its current CEO would lie when they took the witness stand against Shkreli, and told jurors that they would be able to discern those lies from how the witnesses answered questions and were contradicted by documents, emails and other evidence.
The question at the end of the trial, Brafman told jurors, will be “not whether Martin Shkreli is nuts, but whether the case is nuts.”
Brafman, invoking Lady Gaga for a second time, noted that the singer had a song called “Million Reasons,” in which she sings “I just need one good one to stay.”
“The government’s going to stand up and give you 100 million reasons to convict Mr. Shkreli,” Brafman said. “I’m going give you one good reason to acquit him … he’s not guilty.”
“Buckle up your seat belts, ladies and gentlemen. You’re in for a good ride.”
Brafman then walked over to the defense table, where Shkreli stood and hugged him, before sitting down and wiping his brow.
None of the charges against Shkreli relate to the situation that first brought him widespread public scorn: his hiking the price of the drug Daraprim by more than 5,000 percent while running another company, Turing Pharmaceuticals, in 2015.