The Federal Trade Commission (FTC) and seven states filed the motion on Tuesday in US district court in New York City. They allege that since Shkreli's release from prison in May 2022, he has traded stock in at least 60 pharmaceutical companies and publicly commented on their businesses, in breach of conditions prohibiting him from directly or indirectly participating in the pharmaceutical industry, including owning stakes or influencing business decisions.
According to the FTC, Shkreli publicised his activities through live streams and posts on YouTube, X and Reddit. In one stream he told viewers: 'I'm showing you how to trade and invest in biotech.' In another, he described a 'magic trick', saying: 'It doesn't matter what trades I make because I can always find a couple of biotech stocks to smoke.' The agency also alleges he used the streams to organise public campaigns to short pharmaceutical stocks based on predictions that clinical trials would fail.
The filing argues that Shkreli 'should be held in civil contempt and face sanctions to purge his current contempt and to coerce his future compliance'. Proposed sanctions include a complete accounting of his pharmaceutical stock trades, divestment of any ownership in pharmaceutical companies, a monetary fine equal to his profits, and clear and escalating consequences, including additional fines and incarceration, for any future violations.
The ban stems from a 2022 ruling that found Shkreli had run an illegal anticompetitive scheme to raise the price of Daraprim, a drug used to treat malaria, certain cancers and toxoplasmosis, by more than 5,000%, from $17.50 to $750 a tablet. The same year a court fined him $64.6m, describing his conduct as 'egregious, deliberate, repetitive, long-running and ultimately dangerous [and] illegal'.
FTC competition bureau director Daniel Guarnera said on Tuesday that defendants must fulfil their obligations when a court issues an order, and that the filing 'should serve as notice that the FTC will not hesitate to enforce violations of court orders'. New York Attorney General Letitia James also urged the court to punish Shkreli.