FTC and states ask judge to hold Martin Shkreli in contempt

Federal and state authorities asked a federal judge in New York on Tuesday to hold Martin Shkreli in contempt, alleging that the pharmaceutical executive flagrantly violated a lifetime industry ban by trading biotech stocks and livestreaming his commentary on social media.

Contempt Motion Filed in Manhattan Federal Court

The Federal Trade Commission and attorneys general from seven states filed the motion in U.S. District Court in Manhattan, accusing the 43-year-old Shkreli of breaching the terms of a 2022 civil court order. The plaintiffs include New York, California, Illinois, North Carolina, Ohio, Pennsylvania, and Virginia. The original order stemmed from an antitrust lawsuit over Vyera Pharmaceuticals and the anti-parasitic drug Daraprim, which Shkreli’s company acquired and hiked from $17.50 to $750 per tablet.

Conditions of Shkreli’s release from an unrelated federal prison sentence in May 2022 explicitly bar him from participating directly or indirectly in the pharmaceutical industry. The FTC alleges that Shkreli has traded stock in at least 60 pharmaceutical companies and broadcasted his opinions across platforms including YouTube, X, and Reddit.

Alleged Trading Competitions and Market Commentary

Shkreli launched a trading competition in June using an account with a $10 million balance, following earlier public trades and short positions on biotech firms like Cassava Sciences and Capricor. Court filings outline four phases of alleged violations, ranging from 2022 YouTube trading challenges to shorting small biotech firms in 2024 and 2025.

During livestreams, Shkreli evaluated stocks and predicted clinical trial outcomes. In 2025, he told viewers about his trading approach, stating: It doesn’t matter what trades I make because I can always find a couple of biotech stocks to smoke. Later that year, after advising viewers to short a pharmaceutical stock, the target company’s share price dropped 17 percent.

Authorities argue that the reviewed social media activity represents only a fraction of his actual trading. The filing notes that Shkreli told viewers: I have some other accounts that I’d show you, but, like, I know feds are watching, so f[*]ck that.

Proposed Penalties and Legal Pushback

The FTC and the coalition of states want the court to order Shkreli to divest all pharmaceutical stock holdings, forfeit profits generated from the trades with prejudgment interest, and face potential incarceration for future breaches. Daniel Guarnera, director of the FTC’s Bureau of Competition, said in a statement that defendants must fulfill court obligations and that the action serves as notice that the agency enforces its orders.

New York Attorney General Letitia James emphasized that court-ordered bans are binding law, stating that Shkreli’s public livestreams put investors and the public at risk. Responding on social media, Shkreli expressed surprise at the filing, writing: I could see totalitarian NY AG Letitia James trying to limit a citizen’s free speech but not from Trump’s FTC.

Frequently Asked Questions

What initiated the lifetime ban against Martin Shkreli?

The ban stems from a 2022 antitrust lawsuit brought by the FTC and several states over Vyera Pharmaceuticals artificially inflating the price of Daraprim by more than 5,000 percent, alongside a $64.6 million disgorgement order upheld by the 2nd Circuit in January 2024.

Which states joined the FTC in the contempt filing?

New York, California, Illinois, North Carolina, Ohio, Pennsylvania, and Virginia joined the Federal Trade Commission in filing the contempt motion in Manhattan federal court.

What specific sanctions are authorities requesting from the judge?

The plaintiffs asked the court to compel Shkreli to divest all pharmaceutical stocks, pay a fine matching his trading profits plus prejudgment interest, and establish clear, escalating penalties including potential incarceration for future violations.

Who else was named in connection with the alleged violations?

Court filings request that Shkreli’s sister, Leonora Izerne, and his partner, Chelsea Voss, preserve evidence because authorities claim they appear to have assisted him in violating the permanent injunction.