The Federal Trade Commission and seven states asked a federal judge in New York on Tuesday to hold Martin Shkreli in civil contempt, alleging that the former drug executive "flagrantly and repeatedly violated" a 2022 court order barring him from the pharmaceutical industry for life. In a motion filed in Manhattan, they say he broke the ban by trading drug company stocks and broadcasting his opinions about those companies on YouTube, X and Reddit.
Commissioner Mark Meador, whom President Trump nominated to the commission in January 2025, said in a statement that "a lifetime industry ban is only effective if breaches are met with consequences commensurate with the seriousness of the order," CNBC reported. The commission voted 1-0 to authorize the filing, with Chairman Andrew Ferguson recused.
The injunction forbids Shkreli from "directly or indirectly participating in any manner in the pharmaceutical industry," and the joint motion points to two of its specific prohibitions: owning a stake in a drug company and taking any action to influence or control how such a company is managed or run. The office of New York Attorney General Letitia James, a co-plaintiff, argues that his livestreams show him doing both.
Since leaving prison in May 2022 after serving time in a separate securities fraud case, Shkreli has publicly traded the stocks of at least 60 pharmaceutical companies, the FTC alleges. James's office said his trading livestreams began that July with a two-month contest against another YouTuber over who could grow a $50,000 account the most, and that the portfolio he showed viewers was made up largely of drug stocks.
The motion quotes him telling viewers during one stream, "I'm showing you how to trade and invest in biotech." In another, according to the FTC, he described what he called his "magic trick": "It doesn't matter what trades I make because I can always find a couple of biotech stocks to smoke." The agency says he also used the broadcasts to argue publicly for betting against certain drug companies' shares on the prediction that their key clinical trials would fail.
James's office described two of his short positions in detail. During livestreams in October and November 2024, it said, Shkreli traded heavily in Cassava Sciences, which was developing an Alzheimer's treatment, while making the case for shorting it. After Cassava announced a failed clinical study, his brokerage account was worth $841,000, up from $138,200 shortly before the news.
The second bet went the other way. In December 2025, Capricor, another company he had shorted, reported a positive trial result and its stock jumped; his position collapsed, and he declared the account he had been using "over." The office said he returned to livestreaming in June 2026 with a new account showing a $10 million starting balance and has indicated that he keeps other accounts and does most of his trading away from social media.
The filing asks the court to order Shkreli to show why he should not be held in contempt and then to impose sanctions. The FTC and the states want him to sell any pharmaceutical stocks he still owns and pay a fine equal to his profits from trading them, plus prejudgment interest, with no credit for trades that lost money. They also want escalating consequences for any future violation, including financial penalties and potential incarceration. James's office said the coalition wants an auditor, paid for by Shkreli, to account for all of his pharmaceutical trading, and a fine covering profits going back to Feb. 4, 2022, when the ban was issued.
"After a full trial, the court found that Martin Shkreli's conduct drove up prescription drug costs for American patients and blocked the entry of lower-cost generics," Daniel Guarnera, director of the FTC's Bureau of Competition, said in the agency's announcement. "Today's action should serve as notice that the FTC will not hesitate to enforce violations of court orders."
The other states in the coalition are California, Illinois, North Carolina, Ohio, Pennsylvania and Virginia. "A court-ordered lifetime ban isn't a suggestion," James said in a statement. Her office argued that Shkreli's public commentary moves markets because his followers invest on his recommendations, and that the effects make it harder for the companies he bets against to raise capital, conduct research and bring new medications to consumers.
The ban grew out of an antitrust case that the FTC and New York's attorney general brought in January 2020 against Shkreli, another executive and the companies they founded, Vyera Pharmaceuticals and Phoenixus. After a trial, the court ruled in 2022 that Shkreli had organized an illegal scheme to keep generic competitors away from Daraprim, a treatment for toxoplasmosis, a rare and potentially fatal parasitic infection. The scheme, the court found, protected the defendants' ability to raise the drug's price from $17.50 a tablet to $750. Calling his conduct "egregious, deliberate, repetitive, long-running and ultimately dangerous," the court barred him from the industry for life and ordered him to disgorge more than $64 million.
A federal appeals court upheld the injunction in January 2024, and the Supreme Court declined to hear Shkreli's appeal that October.
Shkreli's prison sentence came from a separate criminal case. A federal jury in Brooklyn convicted him of securities fraud in 2017 for lying to investors and manipulating shares of Retrophin, a biotech company he founded. He was sentenced in 2018 to seven years and was released in 2022.
Shkreli did not immediately respond to an email seeking comment, and his lawyer did not immediately return a voicemail, Bloomberg News reported. CNBC said it had requested comment from an attorney for Shkreli.