Today’s newspapers and TV reports are filled with the news that the infamous Martin Shkreli was arrested on fraud charges connected with taking money out of stock for the biotech company Retrophin Inc. to pay off unrelated debts. Shkreli – who has been under constant media scrutiny for price-gouging consumers on pharmaceutical products – wasn’t arrested alone.
In an unusual course of events, his lawyer Evan Greebel, corporate partner for one of the largest law firms in the world, Kaye Scholer was arrested as well. Talk about bad PR for one of the largest law firms in the world? Wow – thats BAD for business. (Or, of course Kaye Scholler could make the pitch, “We are Kaye Scholer – we will advocate for you so much that we even get arrested with you.”)
If convicted, Shkreli and Greebel face up to 20 years in jail.
Martin Shkreli made quite a name for himself in the news. Earlier this year the CEO for the pharmaceutical company remorselessly raised the price of life-saving pill, Daraprim, by 5000% from $13.50 to $750 per pill. He followed that by buying the new Wu-Tang Clan album, Once Upon a Time in Shaolin for $2 million (which was not seized in the arrest, according to tweets by the FBI.) Shkreli has also dabbled with his own career as a rapper and offered to pay for rapper Bobby Shmurda’s bail on drug charges.
Kaye Scholer Lawyer Arrested
Evan Greebel is a lawyer at Kaye Scholer. Before Kaye Scholer, he was a lawyer at the firm Katten Muchin Rosenman for over a decade. He specializes in helping companies with mergers, acquisitions, corporate finance, and securities law. He counsels clients on unsolicited takeovers, proxy contests and other transactions, including auctions and leveraged buyouts.
Whether he is found innocent or guilty, as is famously said, the clock cannot be unrung – this will forever stain his career.
In fact, the consequences may point to other fraudulent activities as Retrophin’s finances have been under internal scrutiny before. A few months ago, the company filed suit against Shkreli for misuse of funds: “Retrophin sued Shkreli in August for misuse of company funds, claiming he engineered numerous transactions between investors in MSMB and the biotechnology firm. Similar allegations are laid out in the company’s regulatory filings. The company alleged in a complaint filed in Manhattan federal court that, through a disastrous trade with Merrill Lynch in 2011, Shkreli cost MSMB more than $7 million, leaving it virtually bankrupt.”
With millions of dollars passed around, and companies left in ruin by deals made by Shkreli, it seems the government believes that the lawyer is part of the shady deals.
Shkreli has justified his activities with statements like this: “Every transaction I’ve ever made at Retrophin was done with outside counsel’s blessing,” he said on an investment blog in February.
Greebel’s arrest will not just have an effect on him, but also on the very public image of Kaye Scholer. The connection to Shkreli is a cancerous one, and it’s important for Kaye Scholer to realize that media will not wait for the court of law to clean their name. While the court of law moves very slowly, the newspapers – and google search engines – will see Kaye Scholer’s partner in handcuffs under arrest. That is major league bad PR for a big league law firm.