Shkreli Loses Part of E-Trade Account to Pay Fraud Fine

“Pharma Bro” and convicted securities fraudster Martin Shkreli already lost a $2 million Wu-Tang Clan album as punishment for bilking investors. Now, he’s losing part of his online brokerage account.

Shkreli, who has founded both hedge funds and biotechnology firms, still owed the federal government about $465,000 for securities violations as of last month, according to a July 10 forfeiture order. Judge Kiyo Matsumoto of the U.S. District Court for the Eastern District of New York granted the government’s request to liquidate a portion of Shkreli’s E-Trade Financial Corp. account to pay the outstanding debt.

Shkreli in March received a seven-year prison sentence for securities fraud and a preliminary order to turn over about $7.4 million, including the never-released Wu-Tang album.

Matsumoto ordered Shkreli in April to immediately pay about $388,000 in restitution and a $75,000 fine, as well as fees and interest.

Shkreli’s E-Trade account is worth about $5 million, according to the forfeiture order. E-Trade must liquidate enough of the account to pay off Shkreli’s fine and restitution liability, the July 10 order said.

Benjamin Brafman, a New York-based attorney who represents Shkreli, declined to comment. Brafman has previously described Shkreli as a “good person,” but “not a perfect person.”

The case is United States v. Shkreli, 2018 BL 244991, E.D.N.Y., No. 15-cr-00637 (KAM), forfeiture ordered 7/10/18.

To contact the reporter on this story: Jennifer Bennett in Washington at jbennett@bloomberglaw.com

To contact the editor responsible for this story: Seth Stern at sstern@bloomberglaw.com