NEW YORK — Wealthy investors say former biotech CEO Martin Shkreli told them he was managing tens of millions of dollars' worth of investments, that they were making double-digit returns and they could withdraw their money at any time.
All of it, prosecutors said on Thursday, was a brazen con.
Shkreli, 34, is best known for jacking up the price of a life-saving drug and trolling his critics on social media, but his trial in Manhattan has focused on his time running a pair of hedge funds.
Assistant U.S. Attorney Alixandra Smith said in closing arguments at his securities fraud trial that Shkreli "lied to investors to get their money into the funds and then lied to them so they wouldn't take it out."
The prosecutor recounted testimony by investors who told jurors that Shkreli claimed to be managing up to $40 million in one of his firms at a time when its brokerage account held only a few hundred dollars. When one investor asked for his money back, Shkreli stalled for months until he used a Ponzi-like scheme to secretly raid a second fund to return a portion of the funds, she said.
"The defendant was lying not only about the ability to get a redemption, but also about where that money was coming from," she said.
As Shkreli was "blowing up" his hedge funds with bad stock picks, he continued to recruit new investors by portraying himself as a Wall Street whiz who graduated from Columbia University, Smith said. He really attended a lesser-known public university, Baruch College.
Claims "that he was some sort of genius in the investing industry were completely untrue," she said.
The defense, which was to give its closing argument later in the day, has sought to portray the impish Shkreli as a misunderstood eccentric who used unorthodox methods to ultimately repay all his alleged victims. In some cases, he made them even richer by giving them stock in a new drug company that became a success, his lawyers say.
Shkreli didn't testify, but throughout the trial he has used Facebook to bash prosecutors and news organizations covering his case, despite his lawyer's efforts to shut him up. In one recent post, he wrote, "This was a bogus case from day one."
The trial is in its fifth week. Jury deliberations could begin on Friday.