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Martin Shkreli Lost Almost $5 Million of Client’s Money

‘Sorry for all the inconvenience,’ Shkreli emailed after losing client’s money.

Finance By

Martin Shkreli blew through nearly $5 million of an investor’s money at his hedge fund in less than one year, the disgruntled client testified in court on Friday.

Back in 2007, Shkreli “wanted to be Stevie Cohen” but he tended to give bad stock tips, said Josiah Austin.

“Sorry for all the inconvenience,” Shkreli allegedly emailed Austin, after the steep loss of Austin’s entire stake in Shkreli’s fund, Elea Capital.

Austin testified in a Brooklyn, NY federal court that Shkreli, now known as the “Pharma-Bro,” later went back on a promise to try to repay Austin by gifting him a stake in Shkreli’s then-new drug company Retrophin at the time of launch.

Also, the Lehman Brothers mistakenly believed that Austin had promised to cover any trading losses for Shkreli, and ended up suing Austin to try to recoup about $2 million the firm lost from Shkreli’s trading.

However, Shkreli is not charged criminally with anything to do with those allegations. Instead, he is accused of looting Retrophin to repay investors he allegedly defrauded while running two other hedge funds, MSMB Capital and MSMB Healthcare, which he formed after Elea.

However, the prosecutors are trying to paint a picture of someone who was a serial failed investor of other people’s money, who name-dropped to lure in new customers.

One of the names Shkreli dropped was legendary pharmacy executive Fred Hassan. Shkreli touted Hassan as an investor in Retrophin in 2011, but Hassan’s daughter Sarah testified on Thursday that her father never invested in Retrophin, according to CNBC.

Sarah Hassan, however, did invest with Shkreli and testified that she repeatedly had to remind Shkreli to not refer to her father as an investor, director or consultant to Retrophin. But she said she later saw documents suggesting that he was.

Shkreli has pleaded not guilty to charges of securities fraud and conspiracy to commit both securities and wire fraud.

Read full story at CNBC