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One Con Washes the Other

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pill23n-3-web

I love this detail about the career of AIDS patient price gouger and Ponzi schemer Martin Shkreli:

Were it not for the financial crash of 2008, Martin Shkreli would probably be nothing more than a footnote in Wall Street history, just another failed, small-time hedge fund manager.

In 2006, aged 23, he set up Elea Capital, which quickly fell into difficulties, and a year later a judge ordered him to pay $2.3m to Lehman Brothers to make good on a bet gone badly wrong.

Then Lehman collapsed, the first of several storied institutions to fall prey to the banking crisis. The investment bank’s demise would spell disaster for many, but it was a stroke of luck for Mr Shkreli, who was spared from making the payment.

As the lyrics to a song by the Wu-Tang Clan, Mr Shkreli’s favourite band, would have it, the reprieve allowed him to keep on “living to tell his story . . . but he carried on with the same old stuff”.

A year later, federal prosecutors allege, he started to construct an elaborate “Ponzi-like” scheme by setting up two more hedge funds, MSMB Capital and MSMB Healthcare.

After years of betting against pharmaceutical companies, he founded his own, Retrophin. Retrophin initially focused on discovering a drug for muscular dystrophy, but Mr Shkreli soon switched to a more lucrative strategy: buying up the rights to old medicines and sharply raising the price.

Nothing like one rip-off artist getting bailed out by the one institutional rip-off artist taxpayers declined to bail out.

While we’re here, a telling detail from the embarrassing NYT puff piece on this overbroad parody of the New Gilded Age earlier this month:

Mr. Shkreli was an indifferent student in high school and studied business in college. Yet almost anyone who knows him will remark on his ability to practically memorize medical journals and textbooks, accumulating an encyclopedic knowledge of drugs and diseases that interest him.

“Martin is the smartest guy in the room at all times,” said someone who worked closely with him on Wall Street. This person was reluctant to discuss Mr. Shkreli at all during a phone call, but did say, “The guy’s intellect is unparalleled.”

Conflating “can memorize stuff” with “unparalleled intellect” explains a lot.

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