The Federal Trade Commission and seven states asked a federal judge in Manhattan on Tuesday to hold Martin Shkreli in contempt, alleging he "flagrantly and repeatedly violated" a 2022 court order banning him for life from the pharmaceutical industry, CNBC reported.
The contempt motion is a test of whether a court-ordered industry ban can actually be enforced against a defendant who, regulators say, has spent the years since his release from prison trading drug stocks and broadcasting market commentary to an online audience.
The filing alleges Shkreli publicly traded in at least 60 pharmaceutical industry stocks and was "publicly broadcasting his opinions about the business and management of many Pharmaceutical Companies through livestreaming and posting on numerous social media platforms, including YouTube, X, and Reddit," according to CNBC.
"A lifetime industry ban is only effective if breaches are met with consequences commensurate with the seriousness of the order," FTC Commissioner Mark Meador said in a statement.
Four phases of alleged violations, from 2022 to a $10,000,000 account
The brief filed by the FTC and the states breaks the alleged violations into four phases, according to Ars Technica:
- A 2022 trading competition with another YouTuber.
- Shorting a small biotech firm in 2024, along with trading in other pharmaceutical company stocks.
- A 2025 trading challenge in which he shorted three small biotech firms.
- A trading challenge begun in June 2026 with a $10,000,000 account.
In livestreams, Shkreli sometimes showed his trading accounts on screen, evaluated stocks and predicted the outcomes of clinical trials, the filing said, according to Ars Technica. In 2025, he told viewers about his "magic trick," saying: "It doesn't matter what trades I make because I can always find a couple of biotech stocks to smoke."
Later that year, after Shkreli advised viewers to short one pharmaceutical company's stock, the company's share price quickly dropped 17 percent, the filing said, according to Ars Technica.
The FTC and the states wrote that the stocks identified are "likely the tip of the iceberg," because FTC staff reviewed only a fraction of Shkreli's social media activity. "I have some other accounts that I'[d] show you, but, like, I know feds are watching, so f[*]ck that," Shkreli said, according to the filing.
What the contempt motion asks the court to do
The filing asks the judge to order Shkreli to divest any pharmaceutical company stocks he owns and pay a fine equal to his trading profits plus prejudgment interest, without offsetting losses, CNBC reported. It also seeks "clear and escalating consequences" for future violations, including financial penalties and potential incarceration.
The motion also asks that Shkreli's sister, Leonora Izerne, and his significant other, Chelsea Voss, be ordered to preserve all evidence, saying both "appear to have assisted or be assisting Shkreli in violating the Permanent Injunction," according to CNBC.
The states joining the filing are New York, California, Illinois, North Carolina, Ohio, Pennsylvania and Virginia — the same seven that joined the FTC in suing Shkreli in 2020.
Why Shkreli was banned from the drug industry for life
The 2022 order stemmed from a finding that Shkreli organized an anti-competitive scheme to perpetuate Vyera Pharmaceuticals' monopoly on the anti-parasitic drug Daraprim, whose price he raised from $17.50 to $750 per tablet while blocking generic competitors, CNBC reported.
The federal court ruled that "Shkreli's egregious, deliberate, repetitive, long-running, and ultimately dangerous illegal conduct warrants imposition of an injunction of this scope," according to Ars Technica. The ban explicitly prohibits him from owning pharmaceutical company stock and from making public statements that could influence a pharmaceutical company's business.
A judge also ordered Shkreli to disgorge more than $64 million. The 2nd Circuit U.S. Court of Appeals upheld the injunction in January 2024, and the Supreme Court declined to take his appeal in October 2024.
"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," said Daniel Guarnera, director of the FTC's Bureau of Competition. "Today's action should serve as notice that the FTC will not hesitate to enforce violations of court orders."
Separately, Shkreli was convicted in 2017 on securities fraud charges tied to hedge funds he operated and another drug company he founded. He was sentenced to seven years in 2018 and released from prison in May 2022, CNBC reported.
How Shkreli responded and what happens next
Shkreli responded on social media that he was surprised by the filing, writing: "I could see totalitarian NY AG Letitia James trying to limit a citizen's free speech but not from Trump's FTC," according to Ars Technica.
It is now up to the judge to decide whether to hold Shkreli in contempt and what penalties — fines, divestment or incarceration — would follow. Shkreli's attorney had not commented as of publication.