Full Breakdown
FTC and States Seek Contempt Over Martin Shkreli’s Alleged Pharma-Ban Violations
By Drooid · · How we work
Alleged Contempt Motion
The Federal Trade Commission and the attorneys general of New York, California, Illinois, North Carolina, Ohio, Pennsylvania and Virginia have filed a joint motion in the U.S. District Court for the Southern District of New York asking that former drug-company executive Martin Shkreli be held in civil contempt. The filing alleges Shkreli has repeatedly breached a 2022 permanent injunction that bars him for life from owning, trading, or influencing any pharmaceutical-industry entity. The agencies seek an order requiring Shkreli to divest any remaining pharma stocks, disgorge profits with prejudgment interest, and impose “clear and escalating consequences” for future violations, including possible incarceration.
Background: Lifetime Ban and Prior Antitrust Findings
In 2022, Judge Denise Cote found Shkreli, while running Vyera Pharmaceuticals, orchestrated an anticompetitive scheme that kept the antiparasitic drug Daraprim out of generic competition, raising its price from $17.50 to $750 per tablet. The Second Circuit affirmed the injunction in January 2024, and the Supreme Court declined review in October 2024.
Alleged Violations Since Release
According to the contempt filing, Shkreli resumed activity in the pharmaceutical sector after his 2022 release. The agencies allege that:
- He has traded shares in at least 60 pharmaceutical companies, using livestreams and posts on YouTube, X and Reddit.
- In July 2022 he launched a “trading challenge” with a $10 million balance, trading 11 pharma stocks—including Pfizer and Moderna—during the livestream.
These claims are presented as allegations by the FTC and the state attorneys general.
Official Statements & Responses
- Daniel Guarnera, director of the FTC’s Bureau of Competition, emphasized the agency’s intent to enforce court orders strictly.
- The FTC voted 1-0 to authorize the contempt action; Chairman Andrew Ferguson recused himself.
Data & Statistics
| Alleged activity | Figure (as alleged) |
|---|---|
| Number of pharma stocks traded | >= 60 |
| July 2022 trading-challenge balance | $10 million |
| Distinct pharma stocks traded in challenge | 11 (including Pfizer, Moderna) |
| Original Daraprim price increase | $17.50 -> $750 per tablet |
| Original disgorgement order | > $64 million |
| Years of prison served for securities fraud | 2017-2022 (released with credit) |
Legal History & Appeals
The 2022 injunction stems from the antitrust case over Daraprim. The Second Circuit upheld the permanent ban in January 2024, and the Supreme Court declined to hear Shkreli’s appeal in October 2024, leaving the lifetime prohibition in force. The current contempt motion is the first federal filing seeking to enforce the injunction through civil penalties since those appellate decisions.
Verbatim Quote
- “Today's action should serve as notice that the FTC will not hesitate to enforce violations of court orders,” — Daniel Guarnera, director of the FTC’s Bureau of Competition.