FTC and seven states seek contempt ruling against Shkreli over pharma ban

The Federal Trade Commission (FTC) and seven US states asked a federal judge on 13 October 2026 to hold pharmaceutical executive Martin Shkreli in civil contempt, alleging he repeatedly violated a lifetime ban on participating in the pharmaceutical industry. The motion, filed in US district court in New York City, alleges the 43-year-old traded stocks in at least 60 pharmaceutical companies and publicly commented on their businesses since his release from prison in May 2022.theguardian.com+1

The case matters because it tests whether a court-ordered industry ban can be enforced against someone who broadcasts his conduct online. Conditions tied to Shkreli's 2022 release prohibit him from directly or indirectly participating in the pharmaceutical industry, including owning stakes in pharmaceutical companies or influencing their business decisions. The FTC and state attorneys general allege Shkreli has flouted those terms openly, turning livestreams into a record of the violations they say occurred.ua.news

What the filing seeks

The FTC alleges Shkreli publicised his activities through livestreams and posts on the YouTube, X and Reddit platforms. During one livestream, he told viewers: "I'm showing you how to trade and invest in biotech," according to the FTC. In another, he described his "magic trick," saying: "It doesn't matter what trades I make because I can always find a couple of biotech stocks to smoke." The FTC also alleges he used livestreams to organise public campaigns to short pharmaceutical stocks on predictions that clinical trials would fail.

The alleged mechanism is straightforward: Shkreli short-sells — betting a stock will fall — pharmaceutical companies whose trials he predicts will fail, then urges followers to join. The New York Attorney General's press release states he encouraged social media followers to invest based on his recommendations. In one example, his Interactive Brokers account climbed to $841,000 from $138,200 shortly before Cassava Sciences announced a failed clinical study, according to the release.

The lifetime ban originated in a January 2022 ruling by the US District Court for the Southern District of New York, which found Shkreli violated federal and state antitrust laws by acquiring Daraprim and raising its price per pill from $17.50 to $750 — a rise of more than 5,000%. The court banned him for life from participating in the pharmaceutical industry and ordered him to pay nearly $65 million. A separate 2022 fine was $64.6m.

How the ban originated

Daraprim treats toxoplasmosis, a parasitic disease that can seriously endanger people with compromised immune systems, including babies born to infected mothers and people with HIV. The New York Attorney General's release states Vyera, with Shkreli as chief executive, purchased the drug in August 2015, increased the price, altered distribution and limited generic competition. The FTC's Bureau of Competition director Daniel Guarnera said a full trial found Shkreli's actions raised prescription drug costs and hindered cheaper generics.

The coalition's allegations span years. In July 2022, Shkreli began livestreaming on YouTube multiple times a week in a "trading challenge" to grow an initial $50,000 deposit over two months, with a portfolio largely made up of pharmaceutical stocks, according to the New York Attorney General's release. In 2024 he began "Evaluating Stocks" livestreams and argued for shorting Cassava Sciences. In December 2025, a positive Capricor clinical trial result collapsed his short position.

The penalties requested are specific. The FTC's court filing states "Shkreli should be held in civil contempt and face sanctions to purge his current contempt and to coerce his future compliance." The filing seeks, among other measures, a complete accounting of his pharmaceutical stock trades, divestment of any pharmaceutical company ownership, a fine equal to his profits from the conduct, and escalating consequences including incarceration for future violations.

What penalties are requested

Officials framed the case as enforcement of existing orders. "Defendants must fulfill their obligations" when a court issues an order, FTC competition bureau director Daniel Guarnera said on 13 October 2026, adding that the filing "should serve as notice that the FTC will not hesitate to enforce violations of court orders." New York Attorney General Letitia James said: "A court-ordered lifetime ban isn't a suggestion." FTC Commissioner Mark Meador said repeated violations could warrant harsher consequences including financial sanctions and, if necessary, imprisonment.

Shkreli's history includes a 2018 sentence of seven years in prison after convictions on two counts of securities fraud and one count of securities fraud conspiracy; he was released early in May 2022. In June 2026, he resumed livestreaming with a new brokerage account showing a starting balance of $10 million, according to the New York Attorney General's release. He has indicated he has other accounts and does most trading off social media.

In one livestream, Shkreli said: "I have some other accounts that I'[d] show you, but, like, I know feds are watching." The New York Attorney General's release also notes that in December 2025, after a Capricor short position collapsed, he announced the brokerage account he was using was "over." The motion awaits a ruling by the federal court in New York City.