The FTC and seven states filed a contempt motion Tuesday against Martin Shkreli, alleging he traded in at least 60 pharmaceutical stocks and offered public commentary on drug companies in violation of a 2022 lifetime industry ban.
The Federal Trade Commission and seven states asked a federal judge on Tuesday to hold Martin Shkreli in contempt, alleging that the former pharmaceutical executive "flagrantly and repeatedly violated" a 2022 civil court order barring him for life from the pharmaceutical industry.
The filing, submitted Tuesday, centers on conduct Shkreli has allegedly engaged in since his release from federal prison in May 2022.
The FTC and the states allege Shkreli traded in at least 60 pharmaceutical industry stocks after his release and was "broadcasting his opinions about the business and management of many pharmaceutical industry companies," according to a press release from the agency.
The contempt filing asks a federal judge to order Shkreli to divest any pharmaceutical company stocks he currently holds, and to pay a fine equal to his profits from any pharmaceutical stock trading — plus prejudgment interest — with no ability to offset those gains against losses.
The filing further requests that the court impose "clear and escalating consequences for any future violations, including financial penalties and potential incarceration."
FTC Commissioner Mark Meador addressed the enforcement action directly. "A lifetime industry ban is only effective if breaches are met with consequences commensurate with the seriousness of the order," Meador said in a statement.
The 2022 order arose from a civil finding that Shkreli organized an anti-competitive scheme to sustain his company's monopoly on the anti-parasitic drug Daraprim. Shkreli had raised the price of Daraprim from $17.50 per tablet to $750 per pill, a move that drew widespread scrutiny and legal action.
In addition to the lifetime industry ban, a judge in that civil proceeding ordered Shkreli to disgorge more than $64 million.
That civil case is separate from the criminal proceedings that ended with Shkreli's conviction on securities fraud charges in 2017, related to hedge funds he once operated and another drug company he founded. He was sentenced to seven years in federal prison in 2018, and was released in 2022 after receiving credit for time served prior to sentencing and other factors.
Daniel Guarnera, director of the FTC's Bureau of Competition, underscored the agency's position on compliance. "After a full trial, the court found that Martin Shkreli's conduct drove up prescription drug costs for American patients and blocked the entry of lower-cost generics," Guarnera said in a statement. "When judgment is entered by a court, whether it's a settlement or an order following a trial, defendants must fulfill their obligations."
Guarnera added that "today's action should serve as notice that the FTC will not hesitate to enforce violations of court orders."
An attorney for Shkreli had not responded to a request for comment as of Tuesday morning.
The case now returns to federal court, where a judge will determine whether the alleged conduct rises to the level of contempt and what remedy, if any, to impose — a proceeding that could test both the durability of civil industry bans and the FTC's enforcement posture under its current leadership.
Marc Sabatini is a staff writer at TechEchelon covering enterprise software, cybersecurity, and the regulatory beats that shape both. He focuses on the deal flow and policy decisions that move markets.
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