In one breath, he calls himself a capitalist and in the next an altruist—the latter because, he claims, his real goal is to invent new drugs for rare diseases. Turing recently announced discounts of Daraprim for hospitals, and Shkreli says that for people without insurance it will cost only $1 a pill. For everyone else, insurance, which he argues is paid for by corporate America’s profits, will cover the cost. “I’m like Robin Hood,” he continues. “I’m taking Walmart’s money and doing research for diseases no one cares about.”
.. In the summer of 2007, the fund tanked when Shkreli made a $2.6 million bet, through Lehman Brothers, that the market would decline. When he was wrong, he refused to pay Lehman, instead making “veiled threats of filing a bankruptcy,” according to a lawsuit. But it was Lehman which went down in flames, during the 2008 meltdown, and although the court found in its favor, the verdict was vacated... On May 29, he tweeted, without explanation, that “this is one of the best days of my life!” The next day he sold almost $4.5 million worth of his own stock in the company. This infuriated investors who believed he was cashing out... According to an affidavit filed by Pierotti and referenced in the Retrophin lawsuit, Shkreli began harassing his family, including writing his wife a letter that said, “I hope to see you and your four children homeless and will do whatever I can to assure this,”.. “Mr. Shkreli advised me that he hasn’t talked to Mr. Pierotti in over a year so how could he be harassing him,” wrote the officer in a report detailing the incident. “I suggested to Mr. Shkreli that he listen to what I was advising him of and not try to make denials based on word semantics …. Mr. Shkreli then hung up.”.. If there’s a bright spot for those who think Shkreli’s actions are unconscionable, it’s that the attention paid to the Daraprim price increase may spell an end to the whole practice. “He basically ruined the concept for other companies,” one biotech banker says.
How to Punish Corporate Fraudsters
EDWARD THURLOW, an English lord chancellor in the 18th century, reputedly said that it’s difficult to punish a corporation because there is “no soul to be damned, and no body to be kicked.”
But there is, in fact, a way to punish corporations for their misdeeds: Bar their officers from government work. So why don’t we?
.. But instead of using these tools, most federal prosecutors focus solely on bringing criminal charges against corporate executives. And if those are unavailable, they look no further. Sally Q. Yates, the deputy attorney general, recently announced that the Justice Department would try to squeeze the names of bad actors out of corporate defendants as a condition of any settlement negotiation. But Justice Department lawyers concede that in many cases it’s practically impossible to secure criminal convictions.
This single-minded focus on criminal convictions is misguided — too often, corporate fraud goes unpunished. JPMorgan Chase paid $13 billion in 2013 for its role in the mortgage crisis. But what happened to its executives that year? None were adequately punished, the stock price rose 28 percent and its C.E.O., Jamie Dimon, got a 74 percent raise.
Volkswagen and the Era of Cheating Software
And cheating on crucial standards is more than slight misconduct. In 1999, in the aftermath of a major earthquake in Turkey, I walked on mangled streets lined by a zigzagged skyline: Some buildings had collapsed into twisted heaps while others next to them stood tall. A seasoned earthquake rescuer explained to me how survival could be so random. Some of the builders cheated on the codes for concrete — too much sand, no interconnecting metal rods to keep the columns in place. Just this month, a powerful earthquake in Chile — where strict building regulations are properly enforced — killed about 20 people, while 17,000 perished in Turkey’s 1999 earthquake.
.. For voting machines that do not have an auditable paper trail, that means “parallel testing” — randomly selecting some machines on Election Day, and voting on them under observation to check their tallies. It is otherwise too easy for the voting machine software to behave perfectly well on all days of the year except, say, Nov. 8, 2016.
Volkswagen Test Rigging Follows a Long Auto Industry Pattern
Beyond emissions, the industry has long been contemptuous of regulation. Henry Ford II called airbags “a lot of baloney,” and executives have bristled at rules requiring higher mileage per gallon.
.. General Motors paid $45 million in 1995 and recalled nearly half a million Cadillacs that were equipped with a chip that shut off emissions control systems while the air-conditioner was being used, to improve the car’s performance.
.. “We call it the tip of the iceberg,” said Jos Dings, the director of Transport and Environment. “We don’t think this will be limited to Volkswagen. If you look at the testing numbers for the other manufacturers, they are just as bad.”