FTC and states seek contempt finding against Martin Shkreli

The Federal Trade Commission and seven states asked a federal judge October 13 to hold Martin Shkreli in civil contempt, alleging violations of the 2022 order banning him from the pharmaceutical industry. The request was filed in the Southern District of New York. ^[1]

The new allegations

The agency says Shkreli traded pharmaceutical-company stocks and broadcast opinions about their management and business after leaving prison in May 2022. Its motion alleges activity involving at least 60 companies, including public campaigns to short stocks based on predictions that clinical trials would fail. ^[1]

CNBC’s October 13 account also reports the joint enforcement request and the claimed stock-trading and broadcasting violations. The allegations concern compliance with an existing injunction, rather than an announcement that the court has already made a new contempt finding against him. ^[4]

What the existing judgment established

The FTC’s January 2024 statement says the Second Circuit affirmed the lifetime ban and $64.6 million disgorgement judgment. The underlying district-court ruling, issued in January 2022, found that Shkreli organized an illegal anticompetitive scheme to preserve a monopoly over Daraprim, a drug used for the parasitic infection toxoplasmosis. ^[2]

According to that statement, the original case began in January 2020 against Shkreli, another executive, Vyera Pharmaceuticals and Phoenixus. The district court found that the defendants blocked generic competition and protected a price increase from $17.50 to $750 per tablet. Those findings explain the origin of the injunction now being enforced. ^[2]

Sanctions requested, not yet imposed

The new filing seeks divestment of pharmaceutical stocks, a fine reflecting trading profits plus interest without offsetting losses, and escalating consequences for future breaches, potentially including incarceration. The agency seeks an order requiring Shkreli to explain why he should not be held in contempt. ^[1]

Commissioner Mark Meador’s October 13 statement supports the request, arguing that a permanent ban requires meaningful consequences for breaches. He describes stock trading and efforts to influence company decisions as evidence of defiance. His statement is the commissioner’s enforcement position, not a judicial ruling resolving the motion. ^[3]

Meador frames the action as protecting the effectiveness of court-ordered remedies across the industry. The immediate procedural question is whether the court accepts the alleged violations and imposes sanctions. The published statement supports seeking that outcome; it does not announce that Shkreli has been jailed or that new penalties have already taken effect. ^[3]