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Tuesday
Jul112017

Compliance officer quit Shkreli fund, complained to SEC 

Martin ShkreliA compliance officer who worked for Martin Shkreli's investment fund quit after less than a year because of his boss's questionable practices.

Jackson Su testified last week to a federal jury at Shkreli’s fraud trial in Brooklyn, New York.

Su worked for Shkreli's fund -- MSMB Capital -- from January 2012 until December of that year.

But "he got so fed up watching his boss execute questionable and unethical transactions that he quit and complained to the U.S. Securities and Exchange Commission," Bloomberg said.

Su, 42, testified Friday that the "last day I was there, Martin took $10,000 of what was left -- there was only $20,000 left in the bank account -- and he transferred $10,000 to his own personal account. That was the last straw.”

Shkreli, 34, is accused of using investors’ money to start Retrophin Inc. and then looting the drug maker of $11 million to pay his hedge fund clients.

He has denied wrongdoing.

Su said MSMB Capital invested $900,000 in Retrophin but the investment was later reclassified as a loan.

"Shkreli would also drop backdated transactions -- sometimes months later -- on Su’s desk for approval, according to the testimony," Bloomberg said.

Su complained to the SEC in May 2012.

The SEC began investigating Shkreli a few months later.

Shkreli was fired from Retrophin in September 2014 and arrested for fraud in December that year.

His fraud trial is continuing.

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Richard L. Cassin is the publisher and editor of the FCPA Blog.