"Pharma Bro" Martin Shkreli Is Found Guilty of Fraud

Mr. Shkreli was convicted of securities fraud in connection with his hedge fund MSMB Capital; of securities fraud in connection with another hedge fund he ran, MSMB Healthcare; and of conspiracy to commit securities fraud, related to a scheme in which he tried to secretly control a huge portion of shares of Retrophin, a drug company he started.

He faces up to 20 years on each of the first two counts, and up to five years on the final count.

The conviction, even as a mixed verdict, was a major defeat for the divisive Mr. Shkreli, who said before the trial that he was "so innocent" that the judge, jury and prosecutors would apologize to him afterward.

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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.

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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.

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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.