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Expert Financial Analysis and Reporting

Martin Shkreli Arrested; This Could Be A Major Catalyst for Small Biotechnology Stocks

Bloomberg reported that Martin Shkreli was arrested at his home this morning (December 17) on charges of securities fraud; his lawyer was also arrested. I recently wrote that Shkreli and his colleagues appeared to blatantly manipulate the stock price of KaloBios. See my article KaloBios: The Fascinating Story of the Takeover of the Company by Martin Shkreli and His Hedge Fund Buddies . Apparently, this arrest is not the result of trading in KaloBios but earlier crimes committed by Shkreli when he ran a hedge fund and also a biotechnology company called Retrophin. I wrote about this in my report.

I would expect that the investigation will extend into the trading and probable (almost certain) manipulation of the stock price of KaloBios. The manipulation of KaloBios likely involved a number of other hedge funds. I hope that this will trigger a broad probe by the FBI into routine manipulation of biotechnology stock prices by hedge fund operatives. Shkreli is only one of many hedge fund operatives that I believe routinely manipulate stocks to their benefit. Shkreli differs only in how stupid and brazen he was in doing this.  A broad federal probe into KaloBios and stock trading in many other companies could potentially result in the arrests of other hedge fund managers. If other arrests do follow, this could be an enormous positive catalyst for small biotechnology stocks that are routinely victimized by the hedge fund cartel.

Tagged as + Categorized as Smith On Stocks Blog


  1. Now if you could only get this out on CNBC! Maybe Cramer could report it?!

  2. Good news….Hope it eventually helps my favorites like NWBO & APDN who have seemingly been driven down sharply by articles posted on SA and other sites…..Hope NWBIO’s meeting goes well tomorrow and you have some new news to report…..Thanks

  3. This event made front page news today. The Shkreli event could very well be the catalyst that opens the door for exposing the blatant hedge fund corruption that takes place daily in the small biopharma sector. Individuals such as Shkreli are always networked with similar personalities who have the same modus operandi. Where there is one there are many. Shkreli has the classic ‘without conscience/I’m untouchable’ mindset that criminals carry. Hopefully that means he left a juicy trail of evidence that will lead to more investigations and ultimately expose the hedge fund network of corruption.

  4. Whether it’s a small business or a large corporation, the manager must adhere to laws and regulations governing the pharmaceutical business.


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