The FBI arrested Shkreli in December 2015, and the U.S. Attorney’s Office for the Eastern District of New York charged him with securities fraud, securities fraud conspiracy and wire fraud conspiracy for interrelated schemes “to ensnare investors through a web of lies and deceit.” The schemes, allegedly executed over a five-year period, involved defrauding investors in two hedge funds founded by Shkreli. The funds, MSMB Capital Management LP and MSMB Healthcare LP, focus investments in the healthcare sector. The indictment alleged that Shkreli induced investors to invest in the hedge funds through material misrepresentations and omissions about prior fund performance and the amount of assets under management, among others. Shkreli allegedly induced approximately $8 million in investments from 21 investors between the two hedge funds.

Shkreli was also charged with a scheme to defraud Retrophin and misappropriate its assets to pay off disgruntled investors of the hedge funds, who were threatening legal action due to Shkreli’s false representations about the performance of the funds. Retrophin allegedly entered into “sham consulting agreements” that were actually settlement agreements with the investors. Prosecutors claimed the Ponzi-like scheme caused Retrophin and its investors to suffer a loss of more than $11 million.

Shkreli’s attorney, Evan Greebel, was also charged with wire fraud conspiracy for his role in the Retrophin scheme, but will face a separate trial at a later date. The U.S. attorney’s office noted his arrest reflected its commitment “to hold accountable corporate executives and licensed professionals who betray their positions of trust in order to fraudulently enrich themselves.”

The U.S. Securities and Exchange Commission has brought parallel civil charges for fraud. In 2003, the SEC purportedly also looked into a hedge fund Shkreli worked at for insider trading after he correctly predicted the stock price of a weight-loss drug would fall, but the SEC was unable to find wrongdoing.

Unrelated to the trial, Shkreli made headlines in 2015 as CEO of Turing Pharmaceuticals, when he increased the price of the drug Daraprim from $13.50 to $750 a tablet. The drug is an antiparasitic that is used to treat toxoplasmosis, often in HIV-positive patients.

The jury selection process for Shkreli’s trial took several days, and over 200 potential jurors were dismissed from selection. During closing arguments, the prosecution told jurors that Shkreli repeatedly lied to investors, and reminded them that lying to people knowingly and intentionally to get their money is fraud, even if they are paid back years later. The defense argued investors did not lose any money, but in fact some even profited, and Shkreli did not intend to defraud anyone.

On the second day of deliberations, the jury asked what “fraudulent intent” meant, and asked clarifying questions about the definition and scope of assets under management. The only other question the jury asked was on the first day of deliberations, when they inquired what time they should conclude deliberating at night.

Shkreli did not testify at trial, but was active on social media throughout it, describing his case as a “silly witch hunt perpetrated by self-serving prosecutors.”

Shkreli was convicted of one count of conspiracy to commit securities fraud in connection with Retrophin, and two counts of securities fraud in connection with MSMB Capital and MSMB Healthcare. He was acquitted of two charges of conspiracy to commit securities fraud and three charges of conspiracy to commit wire fraud. Shkreli has yet to be sentenced and could serve up to 20 years in prison, although legal experts say he will likely face much less time. Shkreli told reporters he was “delighted” with the jury verdict.

*Lauren Border is a summer associate in Fenwick’s litigation group.​​​