FTC and Seven States Seek to Hold Martin Shkreli in Contempt for Violating Lifetime Pharma Ban

The Federal Trade Commission and seven states filed a contempt claim Tuesday against Martin Shkreli, alleging he "flagrantly and repeatedly violated" a 2022 federal court order that banned him for life from the pharmaceutical industry. The filing asks a judge to hold Shkreli accountable for conduct that regulators say began after his release from prison in May 2022.

According to the contempt filing, Shkreli traded in at least 60 pharmaceutical stocks and publicly broadcast opinions about the business and management of pharmaceutical companies, both of which the FTC says fall squarely within the prohibited conduct. The contempt motion asks a court to order Shkreli to divest any pharmaceutical stocks he currently holds and pay a fine equal to his trading profits plus prejudgment interest, with no ability to offset losses against gains.

Regulators are also seeking escalating consequences for any future violations, explicitly including potential incarceration. FTC Commissioner Mark Meador stated that a lifetime ban is only meaningful if breaches carry consequences matching the seriousness of the original order.

The 2022 ban and an accompanying order requiring Shkreli to disgorge more than $64 million stemmed from a civil finding that he orchestrated an anti-competitive scheme to sustain his company's monopoly on the anti-parasitic drug Daraprim, whose price he famously raised from $17.50 per tablet to $750 per pill. That civil case is separate from the criminal securities fraud conviction that sent Shkreli to federal prison in 2018, from which he was released in 2022.