Former drug company executive Martin Shkreli is convicted of fraud

NEW YORK, Aug 4 (Reuters) - Former drug company executive Martin Shkreli was convicted of securities fraud by jurors in a U.S. court in Brooklyn on Friday, after a highly publicized, monthlong trial.

Federal prosecutors had accused the 34-year-old of defrauding investors in his hedge funds and stealing from his old drug company, Retrophin Inc, to pay them back.

Jurors found Shkreli guilty on two counts of securities fraud and one count of conspiracy, on the fifth day of deliberations. Shkreli was also found not guilty on five other conspiracy counts.

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Martin Shkreli, former chief executive officer of Turing Pharmaceuticals LLC, reacts during a House Committee on Oversight and Government Reform hearing on prescription drug prices in Washington, D.C., U.S., on Thursday, Feb. 4, 2016. Shkreli, who is no longer with Turing and faces federal fraud charges unrelated to the drugmaker, declined to make any comments to the committee. 'On the advice of counsel, I invoke my Fifth Amendment,' Shkreli said. Photographer: Pete Marovich/Bloomberg via Getty Images
Entrepreneur and pharmaceutical executive Martin Shkreli listens during a hearing of the House Oversight and Government Reform Committee on Capitol Hill February 4, 2016 in Washington, DC. Martin Shkreli, the controversial former pharmaceuticals boss and hedge fund manager indicted on securities fraud charges, has been subpoenaed to appear at a hearing of a House of Representatives committee on oversight and government reform looking at the prescription drug market. / AFP / Brendan Smialowski (Photo credit should read BRENDAN SMIALOWSKI/AFP/Getty Images)
Entrepreneur and pharmaceutical executive Martin Shkreli waits for a car to pick him up after invoking his Fifth Amendment rights during a hearing of the House Oversight and Government Reform Committee on Capitol Hill February 4, 2016 in Washington, DC. Martin Shkreli, the controversial former pharmaceuticals boss and hedge fund manager indicted on securities fraud charges, has been subpoenaed to appear at a hearing of a House of Representatives committee on oversight and government reform looking at the prescription drug market. / AFP / Brendan Smialowski (Photo credit should read BRENDAN SMIALOWSKI/AFP/Getty Images)
Entrepreneur and pharmaceutical executive Martin Shkreli (L) leaves with his lawyer Benjamin Brafman after invoking his 5th Amendment rights during a hearing of the House Oversight and Government Reform Committee on Capitol Hill February 4, 2016 in Washington, DC. Martin Shkreli, the controversial former pharmaceuticals boss and hedge fund manager indicted on securities fraud charges, has been subpoenaed to appear at a hearing of a House of Representatives committee on oversight and government reform looking at the prescription drug market. / AFP / Brendan Smialowski (Photo credit should read BRENDAN SMIALOWSKI/AFP/Getty Images)
UNITED STATES - FEBRUARY 04: Martin Shkreli, center, former CEO of Turing Pharmaceuticals, leaves a House Oversight and Government Reform Committee in Rayburn Building on 'methods and reasoning behind recent drug price increases,' after invoking his Fifth Amendment right against self-incrimination, February 04, 2016. Turing had raised the price of Daraprim, a drug used by AIDS and cancer patients, from $13.50 to $750 a pill. (Photo By Tom Williams/CQ Roll Call)
WASHINGTON, DC - FEBRUARY 04: Martin Shkreli, former CEO of Turing Pharmaceuticals LLC., is sworn in during a House Oversight and Government Reform Committee hearing on Capitol Hill, February 4, 2016 in Washington, DC. Shkreli invoked his 5th Amendment right not to testify to the committee that is examining the prescription drug market. (Photo by Mark Wilson/Getty Images)
Martin Shkreli, former chief executive officer of Turing Pharmaceuticals LLC, is sworn in during a House Committee on Oversight and Government Reform hearing on prescription drug prices in Washington, D.C., U.S., on Thursday, Feb. 4, 2016. Shkreli, who is no longer with Turing and faces federal fraud charges unrelated to the drugmaker, declined to make any comments to the committee. 'On the advice of counsel, I invoke my Fifth Amendment,' Shkreli said. Photographer: Pete Marovich/Bloomberg via Getty Images
Martin Shkreli, former chief executive officer of Turing Pharmaceuticals LLC, reacts during a House Committee on Oversight and Government Reform hearing on prescription drug prices in Washington, D.C., U.S., on Thursday, Feb. 4, 2016. Shkreli, who is no longer with Turing and faces federal fraud charges unrelated to the drugmaker, declined to make any comments to the committee. 'On the advice of counsel, I invoke my Fifth Amendment,' Shkreli said. Photographer: Pete Marovich/Bloomberg via Getty Images
(L-R)Howard Schiller, interim CEO of Valeant Pharmaceuticals International, Inc., Nancy Retzlaff, chief commercial officer for Turing Pharmaceuticals LLC, and Martin Shkreli, former CEO of Turing Pharmaceuticals LLC, wait for a hearing of the House Oversight and Government Reform Committee on Capitol Hill February 4, 2016 in Washington, DC. Martin Shkreli, the controversial former pharmaceuticals boss and hedge fund manager indicted on securities fraud charges, has been subpoenaed to appear at a hearing of a House of Representatives committee on oversight and government reform looking at the prescription drug market. / AFP / Brendan Smialowski (Photo credit should read BRENDAN SMIALOWSKI/AFP/Getty Images)
WASHINGTON, DC - FEBRUARY 04: Martin Shkreli, former CEO of Turing Pharmaceuticals LLC., smiles while flanked by Nancy Retzlaff, chief commercial officer for Turing Pharmaceuticals LLC., during a House Oversight and Government Reform Committee hearing on Capitol Hill, February 4, 2016 in Washington, DC. Shkreli invoked his 5th Amendment right not to testify to the committee that is examining the prescription drug market. (Photo by Mark Wilson/Getty Images)
Martin Shkreli, former chief executive officer of Turing Pharmaceuticals LLC, smiles during a House Committee on Oversight and Government Reform hearing on prescription drug prices in Washington, D.C., U.S., on Thursday, Feb. 4, 2016. Shkreli, who is no longer with Turing and faces federal fraud charges unrelated to the drugmaker, declined to make any comments to the committee. 'On the advice of counsel, I invoke my Fifth Amendment,' Shkreli said. Photographer: Pete Marovich/Bloomberg via Getty Images
Martin Shkreli, former chief executive officer of Turing Pharmaceuticals LLC, smiles during a House Committee on Oversight and Government Reform hearing on prescription drug prices in Washington, D.C., U.S., on Thursday, Feb. 4, 2016. Shkreli, who is no longer with Turing and faces federal fraud charges unrelated to the drugmaker, declined to make any comments to the committee. 'On the advice of counsel, I invoke my Fifth Amendment,' Shkreli said. Photographer: Pete Marovich/Bloomberg via Getty Images
Martin Shkreli, former chief executive officer of Turing Pharmaceuticals LLC, left, listens as his attorney Benjamin Brafman speaks the media after a House Committee on Oversight and Government Reform hearing on prescription drug prices in Washington, D.C., U.S., on Thursday, Feb. 4, 2016. Shkreli, who is no longer with Turing and faces federal fraud charges unrelated to the drugmaker, declined to make any comments to the committee. 'On the advice of counsel, I invoke my Fifth Amendment,' Shkreli said. Photographer: Pete Marovich/Bloomberg via Getty Images
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Before going on trial, Shkreli had been best known for raising the price of anti-infection drug Daraprim by 5,000 percent in 2015 as chief executive of Turing Pharmaceuticals.

That increase sparked outrage from U.S. lawmakers and patients, and earned Shkreli the nickname "Pharma bro."

The charges stemmed from his career before Turing, as chief executive of Retrophin and manager of hedge funds MSMB Capital and MSMB Healthcare.

Prosecutors claimed that between 2009 and 2014, he lied to MSMB investors, lost their money and paid them back with cash and stock misappropriated from Retrophin.

Jurors heard testimony from several MSMB investors who said Shkreli falsely claimed to have an outside auditor and tens of millions of dollars in assets, sent them fabricated account statements after losing their money and became evasive when they asked for their investments back.

RELATED: Former drug company executive Martin Shkreli

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Martin Shkreli, former chief executive officer of Turing Pharmaceuticals and KaloBios Pharmaceuticals Inc, departs after a hearing at U.S. Federal Court in Brooklyn, New York, U.S., June 26, 2017. REUTERS/Lucas Jackson
Martin Shkreli, chief executive officer of Turing Pharmaceuticals LLC, center, and attorney Evan Greebel, left, exit federal court in New York, U.S., on Thursday, Dec. 17, 2015. Shkreli was arrested on alleged securities fraud related to Retrophin Inc., a biotech firm he founded in 2011. Greebel is accused of conspiring with Shkreli in part of the scheme. Photographer: Peter Foley/Bloomberg via Getty Images
Martin Shkreli, chief executive officer of Turing Pharmaceuticals LLC, exits federal court in New York, U.S., on Thursday, Dec. 17, 2015. Shkreli was arrested on alleged securities fraud related to Retrophin Inc., a biotech firm he founded in 2011. Photographer: Peter Foley/Bloomberg via Getty Images
Martin Shkreli, chief investment officer of MSMB Capital Management, sits for a photograph in his office in New York, U.S., on Wednesday, Aug. 10, 2011. MSMB made an unsolicited $378 million takeover bid for Amag Pharmaceuticals Inc. and said it will fire the drugmaker's top management if successful. Photographer: Paul Taggart/Bloomberg via Getty Images ***Local Caption ** Martin Shkreli
Martin Shkreli, chief investment officer of MSMB Capital Management, works on a computer in his office in New York, U.S., on Wednesday, Aug. 10, 2011. MSMB made an unsolicited $378 million takeover bid for Amag Pharmaceuticals Inc. and said it will fire the drugmaker's top management if successful. Photographer: Paul Taggart/Bloomberg via Getty Images ***Local Caption ** Martin Shkreli
Martin Shkreli, chief investment officer of MSMB Capital Management, sits behind a chess board in New York, U.S., on Wednesday, Aug. 10, 2011. MSMB made an unsolicited $378 million takeover bid for Amag Pharmaceuticals Inc. and said it will fire the drugmaker's top management if successful. Photographer: Paul Taggart/Bloomberg via Getty Images ***Local Caption ** Martin Shkreli
Martin Shkreli (L), former chief executive officer of Turing Pharmaceuticals and KaloBios Pharmaceuticals Inc, arrives for a hearing at U.S. Federal Court in Brooklyn, New York, U.S. October 14, 2016. REUTERS/Lucas Jackson
Martin Shkreli, former chief executive officer of Turing Pharmaceuticals and KaloBios Pharmaceuticals Inc, departs following a hearing at U.S. Federal Court in Brooklyn, New York, U.S., April 26, 2017. REUTERS/Brendan McDermid
Martin Shkreli (C), former chief executive officer of Turing Pharmaceuticals and KaloBios Pharmaceuticals Inc, arrives for a hearing at U.S. Federal Court in Brooklyn, New York, U.S. October 14, 2016. REUTERS/Lucas Jackson
Martin Shkreli (C), former chief executive officer of Turing Pharmaceuticals and KaloBios Pharmaceuticals Inc, arrives at a U.S. Federal Court in New York, U.S., June 6, 2016. REUTERS/Lucas Jackson
Former drug executive Martin Shkreli exits the U.S. Federal Courthouse in the Brooklyn borough of New York February 3, 2016. REUTERS/Brendan McDermid
Martin Shkreli (top, R), former CEO of Turing Pharmaceuticals LLC, arrives before a House Oversight and Government Reform hearing on "Developments in the Prescription Drug Market Oversight" on Capitol Hill in Washington February 4, 2016. REUTERS/Joshua Roberts
Martin Shkreli, former chief executive officer of Turing Pharmaceuticals AG, right, exits federal court with his attorney Benjamin Brafman in the Brooklyn borough of New York, U.S., on Thursday, June 29, 2017. Shkreli is accused of engineering separate frauds tied to his control of two hedge funds he ran as well as�Retrophin Inc., a pharmaceutical company he founded in 2011. Photographer: Peter Foley/Bloomberg via Getty Images
Martin Shkreli (C), chief executive officer of Turing Pharmaceuticals and KaloBios Pharmaceuticals Inc, departs U.S. Federal Court after an arraignment following his being charged in a federal indictment filed in Brooklyn relating to his management of hedge fund MSMB Capital Management and biopharmaceutical company Retrophin Inc. in New York December 17, 2015. REUTERS/Lucas Jackson
Bloomberg Best of the Year 2016: Martin Shkreli, former chief executive officer of Turing Pharmaceuticals LLC, reacts during a House Committee on Oversight and Government Reform hearing on prescription drug prices in Washington, D.C., U.S., on Thursday, Feb. 4, 2016. Shkreli, who is no longer with Turing and faces federal fraud charges unrelated to the drugmaker, declined to make any comments to the committee. 'On the advice of counsel, I invoke my Fifth Amendment,' Shkreli said. Photographer: Pete Marovich/Bloomberg via Getty Images
Martin Shkreli, former chief executive officer of Turing Pharmaceuticals LLC, smiles during a House Committee on Oversight and Government Reform hearing on prescription drug prices in Washington, D.C., U.S., on Thursday, Feb. 4, 2016. Shkreli, who is no longer with Turing and faces federal fraud charges unrelated to the drugmaker, declined to make any comments to the committee. 'On the advice of counsel, I invoke my Fifth Amendment,' Shkreli said. Photographer: Pete Marovich/Bloomberg via Getty Images
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Prosecutors said Shkreli eventually paid investors back with stock or cash from Retrophin by having them sign settlement or consulting agreements with the company. Retrophin directors testified that they did not approve those agreements in advance.

Shkreli's lawyer, Benjamin Brafman, had urged jurors to see his client not as a fraudster but as an eccentric genius determined to find cures for rare diseases.

Brafman said that while Shkreli's statements to investors were not always true, he made them in good faith. He also emphasized that none of Shkreli's investors lost money, a rarity in a securities fraud case. (Reporting By Brendan Pierson in New York; Editing by Jonathan Oatis)

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