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Comment by Clubber | Hacker News Reader

Here's what we just witnessed.

1. Companies were cornering certain drugs, then hiking their prices up significantly. Shkrelli did the same thing (but stated he was willing to give it free for anyone who asked). Note, that this is not illegal in any way, but news was all over it and citizens were pissed.

2. Shkrelli, being outspoken, became the focus of this issue. He dug a hole for himself, but concerning drug prices, he did nothing illegal.

3. Prosecutors, needing to do something got him on fraud charges where he misstated information on an investment but still tripled their money.

4. Shkrelli goes to jail, news and citizenry quelled. Companies still free to continue cornering the market and jacking up prices with impunity.

That's how you get away with this stuff. News made money with the story. Companies made money with their drug hikes, politicians and prosecutors look good because they took action, Shkrelli investors made money. Shkrelli lost, patients lost, taxpayers lost. Rinse, repeat. Systemic corruption.

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No here's what actually happened.

1. Shkreli lied to investors. Regardless of whether the investors eventually made money, Shkreli put them needlessly at risk, and broke the law.

2. He could have gone away for 15 years, or walked away with a slap on the wrist. The judge sentenced him for 7 years in prison, given the fact that this guy showed no remorse, and thought it made him likely to reoffend, perhaps with more serious consequences.

Yes, but you are getting distracted by exactly what you were supposed to get distracted by. He was hated because he hiked drug prices (and he was a dick). The news jumped all over this story and he was a perfect scapegoat.

Sadly, It's still perfectly legal to corner a drug and hike the prices. That was the bigger crime, and it continues to go on, costing taxpayers and patients millions if not billions of dollars, and sometimes costing their health.

Yes, hiking drug prices isn't what you should be looking at. Look at Shkrelli! He's in jail; problem solved. Politicians are now off the hook with this conviction. No problem here, justice served. /s

I initially did not agree with you, then re-read your posts several time, and have come to the conclusion you are absolutely right. Cornering a drug and hiking the price simply for profit and no other legitimate reason (supply chain issue, newer/more effective version, etc...) should be illegal. It is a crime, maybe not in the letter of the law, but ethically, it's a crime.

They're also leveraging the very thing that was intended to keep pharmaceuticals a legitimate industry; the FDA. The drug he (and many companies) target are drugs where the patent has expired but there is no FDA approved generic. I believe FDA approval can take up to 5 years, so that's 5 years it takes for the market to react. Of course in a free market, this would never happen because 10 other companies would start making the drug, but the FDA safeguards are being leveraged against fair competition.

Not only are these companies jacking up prices with monopolistic practices, but they are eroding the legitimacy of the FDA (also to their benefit).

> Cornering a drug and hiking the price simply for profit and no other legitimate reason (supply chain issue, newer/more effective version, etc...) should be illegal.

This is how all patents work. Are you against patents?

Daraprim is not patented.

In this dialog, only one party has constructed a narrative that involves drug prices, and it is not 9889095r3jh.

I'm not entirely sure what you are trying to insinuate.

You're claiming that the person who responded to you was distracted by something, but their response didn't indicate that at all.

It wasn't meant to be a personal attack against him, it was more of an observation that the citizenry are now quelled from being (rightfully) pissed about companies cornering a drug and hiking up prices.

Shkrelli is a scapegoat in reagards to the drug price hiking. It's still going on; it's still perfectly legal; and it seems the politicians are getting paid to keep it that way.

It's more of a thought of how the citizenry can get manipulated. Shkrelli was the face of this practice; Shkrelli is in jail; justice served. Or so the narrative seems to be.

Don’t assume that people who disagree with you are distracted or deluded.

He was arguing the wrong topic; whether or not Shkrelli got a just sentence. That's what we are supposed to be talking about; not the fact that it's legal to monopolize a drug then pursue monopolistic pricing practices on said drug. That's what Shkrelli was infamous for, not fraud.

I may or may not agree with the justness of the sentence, but that wasn't the thrust of my argument, therefore the distraction.

No, you're arguing the wrong topic. The linked article is about the outcome of the trial that occurred. Your 5-point "here's what happened" muddled the relationship between this sentencing and other reasons Shkreli is a public figure.

And thus the "here's what happened" attitude is exactly false; what happened was a petulant fraudster got a middle-of-the-road sentence for exactly the crime he was on trial for.

You're discussing the latest chapter, I'm discussing the whole book.

I'm including all the "Pharmabro" chapters over the last couple of years. Google his name. He isn't famous for fraud.

We understand, you're trying to draw attention to drug price hiking still occurring, and you think that this conviction will blow the whole thing under the rug. I agree with you on the first statement, but I think we disagree that the second was intentional.

The original replier (9889095r3jh) had an issue with (3), which is not really an accurate summarization (I don't think the prosecutors acted because he was hated; using the word misstate makes it seem like a mistake rather than outright lying; and it's totally irrelevant whether he tripled their money).

I agree we should change the regulation structure to prevent drug price hiking: any suggestions on how to do it? I for one would love to donate money to this cause if it's actionable.

Also, I'm sorry you're getting a lot of flak for that comment. It's mostly nitpicking, so safe to ignore once you see the point the nitpickers are making (including me).

I see. Yes, misstated was probably the wrong word. Here is what he got convicted of fraud for:

...the fund was managing $35 million in assets and had an independent auditor.

He said he later learned both of those claims were false

https://www.reuters.com/article/us-usa-crime-shkreli/investo...

That is a lie and therefore fraud, but the 7 year sentence seems out of line with the actual fraud committed (there are degrees).

Shkreli lied to him repeatedly, although he eventually made millions of dollars from the investment.

He made the defrauded investors money. In this crazy country, I'm not sure that giving someone shares in another company to cover other losses is illegal (Retrophin Inc). It seems like a Ponzi, but who knows. Fund managers are given a hell of a lot of leeway.

So to summarize, 7 years seem harsh for lying about the size of the assets and an independent auditor, given the fact that the investors made money. To me this seems more in line that he was punished for the press he got, and embarrassing Congress when they called him in for his perfectly legal monopolistic practices. I would much rather him be convicted for that.

He isn't convicted for being famous. He is convicted for fraud. The sentence takes into account his behavior with regard to his fraud case. He didn't show remorse, and it was likely that he would do it again. Hence a harsher sentence than he expected.

Don't forget 3b) had to go through hundreds of jurors while the news/twitter laughed about people saying they could not be impartial because he "had a punchable face" and "disrespected the Wu Tang Clan". Better hope you don't say anything too mean on Twitter and ever end up in court :(

It's more, "don't be an asshole". Which I feel is quite good advice for anyone. People are less willing to help people who are assholes to others.

In the defense of the potential juror, you cannot disrespect the Wu-Tang Clan. They'll banish you to the 36 chambers.

> 3. Prosecutors, needing to do something got him on fraud charges where he misstated information on an investment but still tripled their money.

I don't think the outcome should matter. Lying to investors should land you in jail. It shouldn't become okay "if investors still made money"

> I don't think the outcome should matter.

According to the article, "prosecutors had pushed for at least 15 years, saying Shkreli had not shown remorse for his actions"

How come the jury is allow to consider his alleged lack of remorse but is not allowed to consider the outcome? Both are current events

If he shows no remorse, and he faced no consequences, why wouldn't he pull another scam? That makes him more of a danger.

1 time is an accident, 2 times is a trend.

What jury? Federal criminal sentencing is done by the judge, not a jury.

Also, I don't agree with GP, but arguably the outcome is less relevant to the risk to society posed by reoffense than is genuine remorse or the lack thereof.

If I push my wife off a cliff for life insurance but she falls onto and kills a terrorist or school shooter does that lessen my crime? Does it even change the nature of my crime? No so it shouldn't enter in.

Judges take into account the "impact" of the crime all the time in sentencing. As they should.

In this case, his crime had no negative impact on anyone, and the unduly harsh sentence sure looks like a sentence for the unlikable (but perfectly legal) price hikes he did.

If you intend to kill someone and fail its less of a crime than if you succeeded. So maybe

Except this investigation was already in progress when the drug price thing happened.

Do you have a source?

It's easily verifiable yourself.

Here's a Newsweek article from September 2015, when the Turing Pharmaceuticals story broke: http://www.newsweek.com/martin-shkreli-drug-manipulation-dar...

> Since at least in January, Shkreli has been under criminal investigation by the United States Attorney’s Office for the Eastern District of New York, court records show. And Shkreli is not alone—some of his business associates have also received grand jury subpoenas in the case.

3. .. tripled their money

haha no... he LOST their money (All of it), LIED about it (fraud), and paid them back with OTHER funds.

Get the facts right first. Misstated - information, the only misstatements are in your post.

https://www.reuters.com/article/us-usa-crime-shkreli/investo...

(Reuters) - One of the investors former drug company executive Martin Shkreli is accused of defrauding testified on Wednesday that Shkreli lied to him repeatedly, although he eventually made millions of dollars from the investment.

This was apparently the guy who alerted investigators to the fraud. He made millions.

I make no claim that they were not paid back and in excess of their initial investment (which was not in pharmaceuticals)

If I lose your money, lie to you, but then I give you 10X your money because I had that in a bank account somewhere because I won the lottery doesn't mean that I didn't commit fraud in relation to your original investment.

Just because your "investment" was repaid at a greater amount doesn't mean you weren't defrauded. He made money because of a settlement, NOT because the investment was in pharma. From your own source article:

...largely through an agreement in which Shkreli gave him shares in his drug company Retrophin Inc.

Shkreli committed fraud, got caught, investors realized they were defrauded, Shkreli then settled privately and paid them above their initial investments with funds completely unrelated to their investments.

He made millions because Shkreli got lucky and was able to settle with them privately. That does not absolve him from the criminal actions he committed just because he settled the civil cases. If Shkreli didn't get lucky with his pharma scheme those investors would not get paid back because their original investment funds were all gone long ago, and again, were not involved in the pharma scheme.

You seem to lack the understanding of the facts in this case.

>Just because your "investment" was repaid at a greater amount doesn't mean you weren't defrauded. He made money because of a settlement, NOT because the investment was in pharma. From your own source article:

Show me where I said he didn't commit fraud. Tell me which facts are wrong. I cited where he made his investors money. You just threw insults. Jackass.

Please stop.

https://news.ycombinator.com/newsguidelines.html

In regards to 3:

His investors only eventually made money after Shkreli paid them in stock and cash from Retrophin.

Prosecutors, on the other hand, have argued that Shkreli should not get any credit for what they described as stealing from Retrophin to pay off the investors.

source: https://www.cnbc.com/2018/03/09/pharma-bro-shkreli-to-be-sen...

Well, you seem to be saying that because the investment tripled, then no crime has taken place.

That's not really how it works.

Exactly. Matt Levine has a good summary:

https://www.bloomberg.com/view/articles/2018-02-28/big-compa...

"The government's argument is that those investors did lose money; it's just that Shkreli eventually paid them back after they started complaining. If your fraud loses money for investors, and they catch you, and you pay them back, then the losses still count. And while Shkreli has an argument that that's not what happened here -- that he gave Retrophin stock to the funds out of the goodness of his heart after they suffered honest losses, rather than to settle legal claims from disgruntled investors accusing him of fraud -- it is frankly not a very good one. And so he is getting tagged with the full amount that investors put into his funds, even though those investors all ultimately got paid back.

That seems analytically correct, though also a bit rough on him. Shkreli is obviously an unpopular character but he is not, as these things go, a particularly bad fraudster. His lawyers were seeking a sentence of "perhaps just 16 months or less," and that actually sounds about right to me for this sort of fraud. If he gets much more than that, I suppose it can be technically justified by legal arguments about the amount of loss that he caused, but I suspect it will really be driven more by his all-around dreadfulness."

I didn't intend to insinuate that. I was more trying to paint a picture of him being a scapegoat for the monopolization of drug prices. His prosecution diverted the public eye from this much larger problem.

Shkreli has repeatedly flaunted his wealth, privilege and false sense of superiority. Although not illegal, it's offensive. Offending the public, whether right or wrong, has consequences. Shkreli is getting a taste of mob justice, or just what he asked for.

> ...Offending the public, whether right or wrong, has consequences. Shkreli is getting a taste of mob justice, or just what he asked for.

Isn't that exactly what the justice system is in place to prevent?

No, it’s what the justice system is in place to formalize.

... in the US, apparently.

Pretty much everywhere, if the justice system doesn’t reflect the population’s desire for mob justice, the people will administer it extrajudicially. The places with low bloodthirst traditionally have strong civic fabrics and low violent crime. If those things change the justice system will adapt or die.

Isn‘t this a chicken and egg problem? If people don‘t get to know court proceedings when they happen it doesn‘t give them more outrage and justice porn and calms down the overall atmosphere. To compare, Swiss people generally don‘t care about what happens in courts, they care about the next direct democractic vote (and get riled up about it sometimes), but I consider that at least more at the root of politics and not targeted at individuals.

Then that "justice" system should be overthrow, along with every judge who supports that line of thinking.

The justice system is theoretically supposed to be somewhat isolated from this by limitations on democracy. But we've sort of morphed our way out of half of those limitations and we're almost getting the bad stuff without getting the good. The system is very prone to mass public opinion, but there's hardly anything any one individual can do to actively participate in the system. There used to be a strict upper limit of 40,000 citizens to one elected representative. Now the average is something like 20x that iirc, which is such a large number of people that it isn't really practical for most people to self organize and get their representatives attention on an issue. At the same time, people can get hyped up about what they read in internet tabloids or are told through the media, and politicians will be forced to respond to that.

>At the same time, people can get hyped up about what they read in internet tabloids or are told through the media, and politicians will be forced to respond to that.

This is spot on. That gives a heck of a lot of power to news organizations. That's scary when thinking of the quality and journalistic integrity of many, if not most news organizations. People react much more strongly to what they read/watch/listen to on the news. If the news can get them hyped up on a topic (opioid crises is the latest) then the politicians react, typically just enough to get the news off their back. We're left with ham-fisted solutions that make the problem worse. x30 years.

I‘d say it gives a heck of a lot of power to influential Twitter users, the press just seems to react to them nowadays.

Yes, social media definitely plays a huge role here. At the same time, the average person has next to no power at all. They have virtually no influence on mass opinion, little chances of having any influence on it, and even if they could, mass opinion typically doesn't have much influence on public policy unless its of the 'Manufactured Consent' variety. Perhaps we should be talking less about Russian Twitter bots 'hacking' our democracy and more about the fact that our democracy was barely working long before the 2016 election.

Yes, it doesn't help that most of the news is incredibly lazy and very easy to manipulate.

Criminal punishment in a republic [0] is exactly the institutionalization of the idea that offending the public has consequences. Hence, in the US, the popular styling of criminal cases as “The people vs. defendant”.

[0] a “republic” in the sense of a regime where government is notionally an institution for the interest of the public rather than a private property interest of a ruler or distinct ruling class; in non-republics, the non-public “owners” are the persons of whose offense consequences are institutionalized by the criminal justice system.

It's breaking the laws of the country who are indirectly created by the "public," it has nothing to do with mob mentality. We are a nation of laws. In fact, republics are a safeguard against mob mentality which can happen in direct democracy.

Until being offensive is illegal, it should hold no bearing in a just trial. Fortunately, we have the first amendment, which makes being an obnoxious asshole in and of itself perfectly legal.

Wouldn't a more complete explanation mention constitution or code of laws or some such as well? Maybe some ex post Latin?

> Wouldn't a more complete explanation mention constitution or code of laws or some such as well?

Constitutions and codes of laws in a republic are intermediate tools to the effect discussed.

> Maybe some ex post Latin?

You mean, more than “republic” is ex post Latin?

In our system of law being offensive is not illegal and we are be wise to remind everyone of this.

Contempt of court is though

The question is whether we as a law based society should be ok with this.

You only go to jail for being offensive in authoritarian-ruled governments. If we're not better than mob justice, please install decent people in NYC's legal system.

Since when? You can always get yourself in trouble by pissing off the public, regardless of government structure.

You don't go to jail for 7 years for it. (Supposedly) not in first world countries.

You do when you also commit fraud with a 7 year sentence.

Remember this when you end up on the wrong side of the law, and the book is thrown at you when it shouldn't be. Easy to cast the first stone.

Aaron Swartz was eligible for 50 years in prison and a million dollar fine based on his computer crimes. That's fair too, right?

Y'all need some empathy and compassion. People are human, and make mistakes. The punishment should fit the crime.

https://en.wikipedia.org/wiki/Aaron_Swartz#Arrest_and_prosec...

That's quite disingenuous. Entirely different circumstances and facts.

You're using the absolute maximum prosecutors were threatening Swartz with in order to extract a plea deal. They would not have brought anything near that to trial had it gone to trial, much less convicted him on it. In fact, in your link, this is what he was offered: "During plea negotiations with Swartz's attorneys, the prosecutors offered to recommend a sentence of six months in a low-security prison".

The statute Swartz was charged under has also widely been recognized as flawed. Not the case with what Shkreli was charged with.

That is the issue though, someone has to decide whether to "throw the book at you" or not. As long as someone is left to decide that, then you risk things like "being offensive" working against you, or "showing remorse" helping you.

The allowance for empathy, compassion and mistakes are what lead to the (to you) unfair punishment that was given.

Shkreli did not "make a mistake". He purposefully defrauded investors.

Aaron Swartz did not make a mistake. He purposely obtained unauthorized access to JSTOR and exfiltrated data for public consumption [1].

Poor judgment with minimal damage should not cost you a tenth of your life, or in Aaron's case, his entire life.

[1] https://archive.org/details/JSTORSwartzEvidenceAllDocs

Yeah, no. I'm rejecting your argument. The two are nowhere near the same. Shkreli purposefully did what he did, and more so, he showed no remorse in doing it, and he insulted the court.

How does 1,2, and 4 matter ? Did he defraud investors ? Yes. Was it illegal, yes ? How does it matter if he was a total douche. He would still be out and doing his thing if he didn't commit a crime.

It was just a summary of my observations.

>He would still be out and doing his thing if he didn't commit a crime.

Yes, this is the biggest point I was trying to push. He would still be doing it because it's perfectly legal. Other companies continue to do this because it's perfectly legal. Nothing has been done to fix this.

Because the sentence was WAY harsher than normal because of 1,2 and 4.

It was a white collar crime. NO monetary damages. And 8 years?? Clearly they sentenced him for 8 years for political reasons

Sentences are largely set by the guidelines published by the United States Sentencing Commission and are based on a standard table[1], which assigns "points" based on the severity of the crime and level of involvement [0]. While it's plausible his sentence was harsh for "political reasons", it's more likely that's just the way the points added up based on the facts of the conviction.

[0] https://www.ussc.gov/guidelines

[1] https://www.ussc.gov/guidelines/2016-guidelines-manual/2016-...

it was white collar crime, so you know, its like totally not a big deal. right?

speaks to me of a culture problem here.

the thing that he was sentenced for was a white collar crime with no monetary damages. If it were a white collar crime with damage done then sure, prison time might have been appropriate. 7 years seems too harsh, and was most likely the byproduct of Martin behaving like an asshole and the general public being "upset" about the drug price hike

Him being a chronic and flaming asshole throughout the whole thing makes it clear that if he isn't somehow taught a lesson, he will keep doing this stuff.

Like a lot of sociopaths, he has figured out that most people are nicer than him and he can get away with a lot of outrageous behavior because most people are simply better behaved than him, so he is unlikely to be crapped on to the degree that he is all too happy to crap on others.

Hopefully the long sentence will clue him that betting that way stops working if you push it far enough. No, you don't get to disregard social norms in how you treat others, then bank on them protecting you. Life is a two way street. Social contracts involve two parts. You don't get to endlessly abuse social norms because your wiring is outside the norm and being mean is perfectly comfortable to you.

I’m not fan of Shrekeli but the 7 years seems to be excessive relative to other similar cases. For example, Rajaratnam got 11 years in what was dubbed as the biggest trading scandal on Wall Street. (source: https://www.reuters.com/article/us-galleon-rajaratnam/rajara... )

For as much of a smug bastard he was, I did have a hearty laugh at his congressional questioning. He treated it with all the dignity and respect it deserved; exactly none. It was political theater performed so the political class could act like they were doing something while the company Shkreli worked for and the rest of their compatriots were, whilist he was humiliating Congress, making record profits doing exactly what he did.

It's a brilliant charade. Politicians were in trouble. They of course are paid to keep things nice for Pharma (including monopolistic practices on drugs) but people were angry and they after all have to get reelected every 2,4,6 years, so they had to make it look like they were doing something without actually doing something. The brought Shkrelli in so they could perform as politicians concerned about their constituents. He wasn't willing to play his part.

Shkrelli still made a perfect scapegoat. The news has seemed to move on from the monopolistic practices thing like it never happened.

The news may have moved on but the people are smarter than most give them credit for. They do remember this stuff, just gotta jog their memories a little bit.

In addition, I noticed that our system punished him for defrauding the wealthy and not for jacking up drug prices, which harms the average American.

He didn't even defraud the wealthy. He played fast and loose but he won for his investors.

defrauding isn't synonymous with stealing- he did take the money under false pretenses. if I come to you for investment in my cool new startup that does distributed crypto machine learning ai for entertaining bored housecats on the blockchain and come back a year later having sextupled your investment in money from illegal arms smuggling, you've still been defrauded.

Except derivatives that almost sank the country for a few decades in 2008. For some reason selling derivative where it's incredibly difficult or impossible to know what securities they are derived from isn't fraud.

https://www.thebalance.com/role-of-derivatives-in-creating-m...

No, he defrauded his investors and lost their money.

He later managed to come up with money from another source to pay them back, but that doesn't erase the fraud that he previously committed.

What you described is a perfect example of a hacky-fix vs well-engineered-solution. Treating the symptom instead of treating the problem. Our entire society is built on layers upon layers of hacky fixes. It's depressing, but look on the bright side. If you want to make a difference in the world, what a time to be alive!

bulls make money, bears make money, pigs get slaughtered

Unless you donate to politicians, the pigs and politicians get really fat.

[RETRACTED]

That got him kicked off Twitter but had nothing to do with the legality of this case.

It is why his bail was revoked and certainly played into the judge’s sentencing

He did some thing wrong on Twitter, so instead of government prosecuting him for that, he was prosecuted for an unrelated charge?

The best explanation of the drug price phenomenon: http://slatestarcodex.com/2016/08/29/reverse-voxsplaining-dr...

Shkreli was the just the lowest hanging fruit who a) didn't have the backing of a major pharma company to mask him and b) he also happened to enjoy the attention he get from playing the "villain" character, ironically or not, in an outrage driven (social) media culture.

I also don't think it's possible to separate his identity within pharma nor his politics with the Clinton drama, from his sentencing in this case.

Nearly every single headline has started with "Pharmabro" and judges always consider external factors and personal behaviour during sentencing.

I'm sure there are some much more egregious and systematic violators of what we consider fair drug pricing and much worse, but they actually have the money and power that Shkreli thought he had to stay out of the limelight. Well.. he was also dumb enough to actually try to get famous on this.

This. There's a bigger problem we need to deal with. The system. The laws. The government. The banks. The Federal Reserve. If there was a Statist 101 course, this entire 300-year project would get a D, maybe a C. It's atrocious, and we all accept it because we are sheep who need protection from the big bad wolves of the world. Eventually, it will become clear that there is one big bad wolf we should really fear.

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