Trading suspension in Shkreli's drug company

The arrest of Martin Shkreli is impacting his pharmaceuticals company in the US market. The University of California has canceled a drug trial with the company after the arrest of Martin Shkreli. Subsequently, the trading in the stock was also suspended after Shkreli was arrested on 17 December 2015 on grounds of securities fraud.

Martin Shkreli, the Chief Executive of Turing Pharmaceuticals AG, has been accused of raising the price of a decade-old drug. This medicine fights against life-threatening parasitic infection. Shkreli's role in skyrocketing the price by 55 times was questioned by US authorities.

The 32-year-old Martin Shkreli was arrested by the Federal Bureau of Investigation (FBI) over accusations that he misled investors of hedge funds and looted a publicly-traded company to cover losses.

According to a report by The Wall Street Journal (WSJ), the drug price was increased from $13.50 a pill to whopping $750. However, unapologetic Shkreli had defended his decision of jacking up the drug price, while saying that it was an obligation for him to maximize profits for his investors.

Brooklyn U.S. Attorney Robert Capers said at a press conference that Shkreli essentially ran his "company like a Ponzi scheme where he used each subsequent company to pay off defrauded investors from the prior company."

Bloomberg reports that Evan Greebel, a New York-based lawyer and is alleged in the Federal indictment to have helping Shkreli in his plans. Greebel was arrested and like Shkreli he pleaded not guilty. He was released on $1 million bond.

Martin Shkreli has been accused of repeatedly looting money and misleading his investors about what was happening. He's allegedly used assets illegally from one of his companies to repay the debtors in another company.

The California-based KaloBios Pharmaceuticals has announced that Shkreli was terminated as CEO. Subsequently, Shkreli resigned from the board as well without any comment. Meanwhile, The University of California has also cancelled a drug trial with Shkreli's company after his arrest.

According to Daily News, Martin Shkreli was fired from the company, where he was for one month only. Shkreli has built up stake in KaloBios company. During Shkreli's tenure, the share price rose to about $40 from below $1 level. However, after the fraud came into light, the trading was suspended in the stock.

Shkreli was losing money for some time and started using funds from one of his companies to pay off debtors of another company. He kept his investors in the dark about all these transactions, according to a complaint by the Securities and Exchange Commission (SEC). This securities fraud was not known much on the Wall Street as well.