Latest testimony in Shkreli trial centers on a Retrophin stock deal gone sour
Fake consulting contracts for angry investors. Threatening notes to the families of ex-staffers. Boasts about big money while the bills went unpaid. All that and more has dominated the prosecution’s case against Martin Shkreli over the last few days.
Tim Pierotti took the stand as a key witness for the prosecution, telling the jury that Shkreli blessed his big play on Rick’s Cabaret, a chain of strip clubs, after he took charge of a Shkreli hedge fund, according to the report from The New York Times. But that had to be sold in 2012 after Shkreli said he needed the money. And shortly after Pierotti came to work to find people packing up the office computers.
Later that year, continues the report, Shkreli arranged to sell 400,000 shares in Retrophin to Pierotti for $400. According to CNBC, Shkreli included Pierotti in a group urged to buy shares in Desert Gateway, a shell he used for a reverse merger to get Retrophin into the public market. He ended up with only 350,000 shares, according to his testimony, with Shkreli holding back 50,000 shares.
Shkreli then urged him and the others to churn their accounts, buying and selling to generate trading volume for the stock, and subsequently demanded it all back. When Pierotti didn’t return it, the relationship descended into a bitter feud. Shkreli followed up in a letter to his wife accusing him of stealing $1.6 million, then threatened his family.
“I hope to see you and your four children homeless,” the letter said. “I will do whatever I can to assure this. Your husband’s arrogance is infuriating, and making an enemy out of me is a mistake.”
Pierotti was also involved in the insider trading scandal that brought down Galleon.