Mr. Brafman focused on the parts of the counts that require that the defendant had knowingly committed fraud.
“Good faith can, in this case, be a complete defense to every one of the charges,” he said. “Why didn’t he just defraud them?” he said. “Why did he sleep in his office in a sleeping bag for two years to make Retrophin a dazzling success?”
And he presented posters showing that, in total, MSMB investors testified that they made more than three times their invested money once Mr. Shkreli paid them back with some combination of cash and Retrophin stock. He could have walked away, Mr. Brafman said.
In focusing on these issues, the lawyer was no doubt trying to distract jurors from much of the evidence Ms. Smith had just gone through, including emails submitted into evidence that seemed to indicate that Mr. Shkreli knew what he was doing.
“On paper, yeah, you know what? Doesn’t look great,” Mr. Brafman told the jurors.
“Even if you see bad emails, or even if you see a statement that you don’t feel is completely accurate,” though, he said, Mr. Shkreli believes what he says. He noted that “every single witness said there’s something wrong with Martin Shkreli.”
Mr. Brafman also called him “one of the most brilliant minds of his generation,” bringing up the drugs that Mr. Shkreli had worked on and warning jurors that “you need to be right before you snuff that out” with a felony conviction.
The first three counts accuse Mr. Shkreli of defrauding investors at MSMB Capital, a hedge fund he ran starting in 2009. The prosecutors showed evidence that Mr. Shkreli had lied about the assets under management, how quickly investors could redeem funds, their ability to redeem funds and who the auditor was. Then, once they had put in money, he sent fake performance updates after having lost all of the fund’s money.
He sent statements until September 2012 — when, in fact, MSMB Capital shut down its brokerage firm account after a bad trade in February 2011, when “there was nothing left in the fund,” Ms. Smith said.
Counts four through six have to do with defrauding investors at MSMB Healthcare — a slightly weaker case, in terms of the evidence presented.
Here, Ms. Smith acknowledged that “the defendant was a little less clear” about the promises he made to investors about things like auditors. And, because even prosecutors agree that MSMB Healthcare did invest in Retrophin,…