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Whistleblower News: Martin Shkreli, Merrill Lynch, Abiomed

by HB Whistleblower Legal Team


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Martin Shkreli’s Journey From Pharma Exec to Inmate #87850-053

The notorious ‘Pharma Bro’ will be sentenced in a Brooklyn courtroom on Friday.

Martin Shkreli burst on the scene as an enfant terrible, a securities savant who was working on Wall Street at 17, set up his own hedge fund at 23, and launched the biotech company Retrophin Inc. after teaching himself biology.

Some may remember him as the trader who shorted drug companies after trash-talking them. Or the pharma executive who came under withering criticism for raising the price of a life-saving medication more than 5,000 percent. President Donald Trump labeled him a “spoiled brat,” while the campaign of Democratic presidential candidate Bernie Sanders called him a “poster boy for drug company greed.”

Shkreli, 34, now faces his day of reckoning Friday when he’s sentenced by U.S. District Court Judge Kiyo Matsumoto in Brooklyn, New York. She’ll decide whether to grant Shkreli’s request to get as little as a year in prison or the 15-year-or-more sentence that prosecutors say he deserves for having lied to investors in his hedge funds and illegally controlling Retrophin shares. read more »

Germany's SAP admits misconduct in South Africa Gupta deals

German software maker SAP found compliance breaches and “indications of misconduct” in $50 million of public sector deals in South Africa involving the Guptas, friends of former president Jacob Zuma accused of corruption, it said on Thursday. read more »

Lawyer’s ‘Get-Rich’ Scheme Has B-Movie Start, Prison Finale

DOJ lawyer gets 30 months over pilfered whistle-blower cases
Prosecutor says Werkin’s scheme motivated by ‘money and greed’

A job at a prestigious law firm with a salary of almost half a million dollars didn’t stop Jeffrey Wertkin from wearing a wig to carry out a criminal scheme that his defense attorney said was like a scene out of a “B grade action movie.”

In the end, what he got out of it was a 2 1/2-year prison sentence.

A one-time U.S. Justice Department lawyer, Wertkin came up with a plan to steal secret whistle-blower lawsuits and then sell the documents to the companies named in them because he believed his $450,000 salary at Washington’s Akin Gump Strauss Hauer & Feld LLP undervalued him, a prosecutor told the judge during a sentencing hearing in San Francisco federal court.

“He wanted a get-rich quick scheme,’’ said Assistant U.S. Attorney Robin Harris. “He was motivated by money and greed.’’ read more »

Equifax Ironically Could Gain From Senate Bill Meant to Punish It

Equifax Inc. has been a pariah in Washington ever since it disclosed a massive hack last year that put millions of consumers at risk of having their identities stolen.

But in an ironic twist, lawmakers could end up helping the embattled company at the same time they move to punish it.

Included in last-minute changes to the U.S. Senate’s sweeping rewrite of financial rules is a provision that might make it easier for Equifax and rivals to compete in the business of providing credit scores for borrowers trying to get home loans.

Senate Banking Committee Chairman Mike Crapo offered an amendment to his own bill late Wednesday that would direct mortgage-finance giants Fannie Mae and Freddie Mac to use credit assessments offered by multiple companies, instead of exclusively relying on FICO scores provided by Fair Isaac Corp.

It turns out that the main rival to Fair Isaac is VantageScore Solutions LLC. And who owns VantageScore? Equifax and its credit reporting competitors, TransUnion and Experian Plc. read more »

Abiomed to pay $3.1 million to settle kickback allegations

A Danvers medical device company has agreed to pay $3.1 million to the federal government to settle allegations that it made kickbacks to doctors who were wooed to use the firm’s heart pumps on Medicare patients.

The kickbacks allegedly made by Abiomed Inc. consisted of lavish meals at some of the country’s most swanky restaurants, including Menton in Boston, Spago in Beverly Hills, and Eleven Madison Park in Manhattan.

Attendees included the spouses of physicians and people who used bogus names, such as Mike Anesthesia, according to the office of US Attorney Andrew E. Lelling. Abiomed managers approved all the expenses for the meals submitted by the underlings.

“We expect today’s settlement with Abiomed to serve as a warning to medical device manufacturers who try to improperly influence the treatment decisions of physicians,” said Lelling. “Providing doctors with lavish meals, or meals that focus on entertainment rather than education or science, can impair a physician’s independent medical judgment – something each and every patient is entitled to.” read more »

Merrill Lynch Charged With Gatekeeping Failures in the Unregistered Sales of Securities

The Securities and Exchange Commission today announced settled charges against Merrill Lynch, Pierce, Fenner & Smith Inc. for its failure to perform required gatekeeping functions in the unregistered sales of securities on behalf of a China-based issuer and its affiliates.

The SEC’s order found that Merrill Lynch sold almost three million shares of Longtop Financial Technological Limited’s securities into the market despite red flags indicating that the sales could be part of an unlawful unregistered distribution.  Ultimately, the distribution generated almost $38 million in proceeds for the overseas issuer and its affiliates.

“Broker-dealers are important gatekeepers,” said Antonia Chion, Associate Director of the SEC’s Division of Enforcement.  “A broker-dealer has a duty to conduct a reasonable inquiry and know its customers before effecting unregistered sales of securities.” read more »