The jury, which was outwardly quiet during its five-day deliberation — it sent only one substantive note — was never deadlocked, said one juror, who spoke after the verdict on condition of anonymity, because he did not want his name immediately associated with the case.
He described the deliberation method as methodical and logical and said the jurors had focused on whether Mr. Shkreli had intended to harm investors who gave him money.
“In some of the counts at least we couldn’t find that he intentionally stole from them and the reasoning was to hurt them,” the juror said.
As Judge Kiyo A. Matsumoto read the verdict, Mr. Shkreli, wearing a black polo shirt and khakis, sat with his arms crossed.
He showed outward relief when Judge Matsumoto said he was found not guilty on count seven, mouthing “Yes” and patting his lawyer Benjamin Brafman on the back. When she said he was guilty of count eight, the Retrophin securities-fraud conspiracy, he hung his head. After the verdict was read, he gathered in a circle with his lawyers, looking a little shaken, then pulled on a hoodie. By the time he got outside court, where he gave his statements, he was smiling and speaking smoothly.
A sentencing date was not set; Judge Matsumoto said she would wait for submissions from both sides on how much money was lost, as the sentencing depends on that. She set a fall date for those submissions.
Mr. Shkreli was accused of securities and wire fraud related to MSMB Capital and MSMB Healthcare. Prosecutors charged he then illegally used Retrophin to repay the defrauded MSMB investors.
The prosecution brought forth an “avalanche” of evidence, as the prosecutor Jacquelyn Kasulis put it in her rebuttal argument, that included a threatening letter he sent to the wife of a former employee, statements he sent to MSMB investors showing great returns at the same time he had no money in fund accounts, three versions of a backdated agreement to make it look as if MSMB Capital had invested in Retrophin when it had not, as well as claims about assets under management that were wildly out of line with his actual fund size.
“It’s time for Martin Shkreli to be held accountable,” she said.
The government argued that Mr. Shkreli had lied to investors about issues like whether his hedge funds had an auditor or law firm working on it, and about their liquidity. He lost everything in MSMB Capital after a bad trade in February 2011, and hid that fact, sending investors statements for more than a year and a half showing strong returns — even though the fund did not trade after that month, and had no assets.
The defense, which did not call any witnesses, focused on a few themes:
A major factor was Mr. Shkreli’s state of mind, as a fraud conviction requires the defendant to knowingly commit fraud. The defense asked why Mr. Shkreli, if he wanted to commit fraud, did not commit fraud: He ultimately paid back his investors with shares of Retrophin, which became valuable, along with cash. His lawyers also asked how Mr. Shkreli profited, painting him as a hardworking oddball who, rather than throwing in the towel after his funds imploded, vowed to get his investors’ money back. He paid them back late, they argued, but he paid them back.
The defense tried to undercut the testimony of the prosecution’s witnesses, portraying them as rich sophisticates who did not carefully read the documents Mr. Shkreli gave them.
And his lawyers asked why he would defraud Retrophin when he had started and worked extremely hard on Retrophin. He had done that, Mr. Brafman said, in part to get MSMB investors what they were due. “He did it and it worked and they got paid,” he said.
The case has featured a number of strange twists. Judge Matsumoto ordered Mr. Shkreli to stop talking in and around the courthouse after he dropped into a room full of reporters and began offering his thoughts on the trial. Victims, usually the most sympathetic witnesses in a trial, were undercut here by the defense as rich and out of touch; when the prosecution tried to limit the victims it would call to testify, the defense urged it to call more. The investors all made money — by the defense’s tally, more than triple what they invested.
And it was the defense bringing in personal claims about their client’s life, from his sexual orientation to how frequently he brushed his teeth to his anxiety and depression, often over government objection. And while defendants usually keep a low profile during a federal trial, Mr. Shkreli livestreamed after court many days.
Mr. Shkreli seemed to take pains to appear that he was not taking the trial very seriously. During the prosecution’s rebuttal argument, the last thing the jury would hear from either side, he read a book. He popped into a room full of reporters to denounce the prosecution as “junior varsity,” leading Judge Matsumoto to issue an order preventing Mr. Shkreli from talking in and around the courthouse.
He became widely known after raising the price of a drug called Daraprim to $750 a pill from $13.50 overnight. He courted controversy, defending the price increase, then bragging that he had bought the sole copy of a Wu-Tang Clan album for a reported $1 million. The case against him, however, has nothing to do with the Daraprim pricing, and the federal investigation into Mr. Shkreli’s hedge fund and Retrophin work began well before the other controversies.
His lawyer, Mr. Brafman, portrayed him, in closing arguments, as a brilliant man who could pioneer new cures for diseases, something that the government raised concerns about outside the presence of the jury.
“There’s been a suggestion that somehow the great visionary of his generation will be snuffed out,” Judge Matsumoto said on July 28 as lawyers debated whether Mr. Brafman had overstepped in his closing, adding that she would instruct jurors not to consider the effect of conviction “upon anybody’s life or on humanity.”
The verdict was a partial win for federal prosecutors in the Eastern District of New York, who had pursued the case for more than four years and have been trying to build up their business unit to compete with their colleagues in Manhattan. This was by far the most closely watched case in the office’s financial unit in years.
The trial was hard-fought to the end, with both sides giving summations that lasted around four hours.
“This trial was particularly challenging for both the prosecution and the defense,” said Mark C. Zauderer, a partner at Flemming Zulack Williamson Zauderer. “The quixotic behavior of the defendant made the outcome even more unpredictable than usual.”
An earlier version of this article misstated Martin Shkreli’s position as the verdict was read. He was sitting, not standing.