FTC and seven states ask judge to hold Martin Shkreli in contempt

The Federal Trade Commission and the attorneys general of seven states asked a federal judge on Tuesday to hold Martin Shkreli in contempt of his lifetime ban from the pharmaceutical industry. The former executive, who raised the price of the anti-parasitic drug Daraprim from $17.50 to $750 a pill virtually overnight and was sentenced to seven years for the fraud behind it, has violated the order “flagrantly and repeatedly” for nearly its entire duration, the agencies say — trading stock in dozens of drug companies and discussing the industry in livestreams, sometimes with his accounts shown on screen.

The filing breaks the alleged violations into four phases: a 2022 trading competition against another YouTuber, a 2024 short position in a small biotech firm, a 2025 trading challenge that shorted three biotechs while trading in many other pharmaceutical stocks, and the current one — a challenge begun in June on a $10 million account, again trading pharmaceutical stocks. On stream he evaluated stocks and predicted the outcomes of pivotal clinical trials. In 2025 he explained his “magic trick”: “It doesn't matter what trades I make because I can always find a couple of biotech stocks to smoke.” Later that year he advised viewers to short one pharmaceutical company; its stock quickly dropped 17 percent.

The 2022 order prohibits Shkreli from owning stock in pharmaceutical companies and from making public statements that could influence a pharmaceutical company's business — language that converts each broadcast into its own exhibit. “A lifetime industry ban is only effective if breaches are met with consequences commensurate with the seriousness of the order,” FTC Commissioner Mark Meador said in a statement. What the agencies now ask the court to impose is exactly that: divestment from all pharmaceutical companies, a fine equal to Shkreli's profits from trading their stocks, and “clear and escalating consequences” for further violations — further financial penalties, and incarceration.

Shkreli says the filing surprised him, and answered it as a speech question: “I could see totalitarian NY AG Letitia James trying to limit a citizen's free speech but not from Trump's FTC.” The same seven states — New York, California, Illinois, North Carolina, Ohio, Pennsylvania and Virginia — joined the FTC's original 2020 lawsuit over the Daraprim scheme, which blocked generic competitors from the market.

The fourth phase is still under way: begun in June, on a $10 million account, with the positions discussed on stream. The FTC's record of it comes largely from the broadcasts.