Federal regulators and state prosecutors asked a federal judge on Tuesday to hold former pharmaceutical executive Martin Shkreli in civil contempt, alleging he repeatedly breached a lifetime ban prohibiting him from participating in the drug industry.
The motion, filed in U.S. District Court in Manhattan by the Federal Trade Commission and seven states, claims that Shkreli has traded shares in at least 60 pharmaceutical companies since leaving federal prison in May 2022. The state attorneys general joining the petition represent New York, California, Illinois, North Carolina, Ohio, Pennsylvania and Virginia, though one news account counted six states.
According to the court filing, Shkreli routinely documented his investments and shared opinions on biotech companies across social media platforms, including YouTube, X and Reddit. The filing alleges he hosted livestreams to orchestrate short-selling campaigns against specific firms ahead of major clinical trial results.
Regulators Detail Market Bets
In the court papers, authorities cited Shkreli telling his online audience, “I’m showing you how to trade and invest in biotech,” and referring to his ability to find vulnerable biotech stocks as a “magic trick,” according to CNBC and The Guardian.
The filing alleges Shkreli targeted Cassava Sciences, an Alzheimer’s drug developer, before the company reported disappointing trial results in November 2024. The New York Post reported that his brokerage balance surged from $138,200 to $841,000 around that time, although officials noted that not all of the more than $700,000 gain came from that specific wager. Regulators also noted that he traded shares of major pharmaceutical manufacturers, including Pfizer, Moderna, Eli Lilly and Novo Nordisk.
Not all of his reported market bets were successful. In late 2025, Shkreli allegedly shorted Capricor Therapeutics, warning viewers about the company before its stock rose sharply by over 370 percent following favorable trial results. He subsequently admitted on a livestream that his Charles Schwab account had been wiped out, according to the government’s filing.
Demands for Penalties and Evidence Preservation
The FTC and state prosecutors, including New York Attorney General Letitia James, have urged U.S. District Judge Denise Cote to force Shkreli to provide a complete, sworn accounting of every pharmaceutical trade made since February 2022. They are also seeking a financial audit conducted at his expense and an order requiring him to divest all current pharmaceutical holdings.
Additionally, officials want Shkreli to pay a fine equal to all profits derived from those trades plus interest, without the ability to deduct losses from unsuccessful transactions. The motion warned that continuing violations should trigger escalating consequences, including further financial penalties and potential imprisonment.
“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 reported by CNBC.
The regulators have also asked the court to require his sister, Leonora Izerne, and his partner, Chelsea Voss, to preserve all records tied to his trading activity, alleging that both women appeared to help facilitate his transactions.
Origins of the Lifetime Ban
Shkreli first drew widespread public outrage in 2015 when his firm, then known as Turing Pharmaceuticals and later Vyera Pharmaceuticals, raised the price of Daraprim from $17.50 to $750 per tablet, an increase of more than 5,000 percent. A separate report in Gizmodo cited the original price as $13.50. The drug is used to treat toxoplasmosis and other parasitic infections.
Following an antitrust lawsuit, a federal court in 2022 issued the lifetime ban on Shkreli’s involvement in the pharmaceutical sector and ordered him to return roughly $64.6 million in profits, an amount officials say remains unpaid. The ban was affirmed by a federal appeals court in January 2024, and the U.S. Supreme Court declined to take up his appeal later that year.
Shkreli had also served roughly four years of a seven-year federal prison term following a 2017 conviction on unrelated securities fraud and conspiracy charges before his release in 2022.
Judge Cote has not yet ruled on the contempt motion, and Shkreli and his legal counsel did not immediately comment on the government’s filing.
