Former drug company executive Martin Shkreli should reveal more about his finances if he wants his $5 million bail cut to $2 million, a Brooklyn federal judge said Monday, a week before Shkreli is set to face trial on securities fraud charges.
Lawyers for Shkreli, who drew public outrage after raising the price of a life-saving drug 5,000 percent when he was CEO of Turing Pharmaceuticals in 2015, said in a court filing last week that he needed the $3 million to pay back taxes and his lawyers and accountants. Federal prosecutors have not agreed to the request.
U.S. District Judge Kiyo Matsumoto did not rule on Shkreli's request at a hearing on Monday, but said she would be "reluctant" to release the money without knowing more about what assets Shkreli had and what he had done to liquidate them.
Shkreli has pleaded not guilty to criminal charges involving his management of his previous company Retrophin Inc and the hedge fund MSMB Capital Management from 2009 to 2014.
Prosecutors claim that he engaged in a Ponzi-like scheme in which he defrauded investors in MSMB and took millions in assets from Retrophin to repay them. A trial is set to begin next Monday and last at least four weeks.
Alixandra Smith, Assistant U.S. Attorney in Brooklyn, said at Monday's hearing that Shkreli had reported his net worth at $70 million after being arrested.
Shkreli's lawyer, Benjamin Brafman, conceded that Shkreli still owned a share of Turing worth $30 to $50 million, but said he could not sell it without the consent of the other partners in the company.
Smith said the government was skeptical that Shkreli was cash-poor in part because he bragged of his wealth on Twitter and other social media, flaunting purchases like a $2 million Wu-Tang Clan album, a Picasso and a World War II-era Enigma code breaking machine.
Shkreli has also pledged in a Facebook post to pay $100,000 for information leading to the arrest of the killer of former Democratic National Committee employee Seth Rich, whose murder has sparked conspiracy theories. He also offered $40,000 to a Princeton student who solved a mathematical proof, Smith said.
Brafman, however, suggested that Shkreli's social media boasting was just a sign of the times.
"Tweeting has become, unfortunately, so fashionable, and when people tweet, they don't always mean what they say," he said.
(Reporting By Brendan Pierson in New York; editing by Diane Craft)