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Retrophin to pay $3 million in U.S. lawsuit over Shkreli's tenure
Source: Reuters
World | Wed Feb 3, 2016 9:59am EST
Retrophin to pay $3 million in U.S. lawsuit over Shkreli's tenure
NEW YORK | BY NATE RAYMOND
Retrophin Inc has agreed to pay $3 million to resolve a lawsuit by investors accusing the pharmaceutical company of failing to disclose various transactions that benefited former Chief Executive Officer Martin Shkreli, who has since been indicted for securities fraud.
The proposed class action settlement, which also resolves claims against Shkreli, was filed in federal court in Manhattan on Friday and granted preliminary approval by U.S. District Judge Kevin Castel on Tuesday.
The $3 million settlement equals 7 percent to 10 percent of the $26 million to $41 million in likely recoverable damages, according to lead plaintiff Grachya Kazanchyan's lawyers at Pomerantz LLP, who in turn plan to seek $1 million in legal fees.
The lawsuit centers on many of the same allegations at the heart of the criminal case in federal court in Brooklyn against Shkreli, who founded Retrophin and was fired in 2014, the same year the lawsuit was filed.
Prosecutors said Shkreli engaged in a Ponzi-like scheme, defrauding investors in his MSMB Capital Management hedge fund and misappropriating $11 million in assets from Retrophin to repay them.
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Retrophin to pay $3 million in U.S. lawsuit over Shkreli's tenure
NEW YORK | BY NATE RAYMOND
Retrophin Inc has agreed to pay $3 million to resolve a lawsuit by investors accusing the pharmaceutical company of failing to disclose various transactions that benefited former Chief Executive Officer Martin Shkreli, who has since been indicted for securities fraud.
The proposed class action settlement, which also resolves claims against Shkreli, was filed in federal court in Manhattan on Friday and granted preliminary approval by U.S. District Judge Kevin Castel on Tuesday.
The $3 million settlement equals 7 percent to 10 percent of the $26 million to $41 million in likely recoverable damages, according to lead plaintiff Grachya Kazanchyan's lawyers at Pomerantz LLP, who in turn plan to seek $1 million in legal fees.
The lawsuit centers on many of the same allegations at the heart of the criminal case in federal court in Brooklyn against Shkreli, who founded Retrophin and was fired in 2014, the same year the lawsuit was filed.
Prosecutors said Shkreli engaged in a Ponzi-like scheme, defrauding investors in his MSMB Capital Management hedge fund and misappropriating $11 million in assets from Retrophin to repay them.
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Read more: http://www.reuters.com/article/us-retrophin-lawsuit-shkreli-idUSKCN0VC1K8
