Feds' case spotlights Shkreli’s disastrous biotech short -- which forced him to launch Retrophin
A bad bet shorting Orexigen Therapeutics’ stock back in 2011 torpedoed Martin Shkreli’s hedge fund, according to a former staffer testifying in the Shkreli fraud trial in New York this week. But it also led Shkreli to launch Retrophin, which prosecutors say the outspoken exec went on to use as his own personal piggy bank to pay back investors in the fund.
CNBC’s coverage of the trial spotlighted the bad bet, which left Shkreli’s fund owing $10 million to Bank of America/Merrill Lynch, far more than the fund had. But instead of telling his investors that he had lost all their money, he insisted that the fund was fat with cash. Then he proceeded to stall any payouts for years as the investors grew increasingly angry and impatient, according to testimony.
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