Regulators return to federal court
New York Attorney General Letitia James, the Federal Trade Commission and six other states have asked a federal judge to hold Martin Shkreli in contempt for allegedly violating his lifetime ban from the pharmaceutical industry. The motion says Shkreli traded pharmaceutical stocks, discussed companies in livestreams and encouraged followers to invest based on his analysis.
The filing asks the U.S. District Court for the Southern District of New York to order a full accounting of the trades, require Shkreli to sell pharmaceutical holdings and impose a fine equal to his profits from those trades, plus interest. The allegations have not yet been adjudicated in the new proceeding.
The ban grew from the Daraprim case
The restrictions date to an antitrust case brought by New York, the FTC and other states. In January 2022, the court found that Shkreli and his company used unlawful tactics to preserve monopoly control of Daraprim, a treatment for toxoplasmosis. The company raised the price of a pill from $17.50 to $750 after acquiring the drug and limited competition from generic manufacturers.
The court barred Shkreli for life from participating in the pharmaceutical industry and ordered him to pay nearly $65 million. The order covered more than formal employment at a drug company. According to the state’s new filing, it also prohibited acquiring or holding an ownership interest in a pharmaceutical company and making public statements intended to influence a company’s business.
What regulators say happened next
Regulators allege that after Shkreli’s release from prison in May 2022 on a separate securities-fraud sentence, he began buying and discussing pharmaceutical stocks. They point to livestreamed trading challenges, later programs evaluating companies and posts about investment positions.
The motion argues that the public commentary can affect markets when followers react to recommendations, potentially influencing a company’s price and ability to raise money. It also says the trading itself constitutes prohibited ownership. Shkreli will have an opportunity to contest the interpretation of the injunction and the evidence offered by the government.
The penalties being requested
The coalition wants an independent auditor, paid for by Shkreli, to reconstruct his pharmaceutical trading since the ban took effect. It asks for divestment of all covered stocks and forfeiture of profits without offsetting gains against losses on other trades.
The filing also seeks additional fines and the possibility of incarceration if future court orders are not followed. Contempt sanctions can be designed both to compensate for harm and to compel compliance, but the judge will decide whether a violation occurred and which remedies are lawful and proportionate.
A test of how broad an industry ban can be
The dispute presents a question larger than one investor: what conduct counts as participation in an industry when trading, analysis and social-media influence overlap. A narrow interpretation might focus on company management or employment. The government’s position is broader, treating ownership and market-moving advocacy as direct participation.
New York is joined by California, Illinois, North Carolina, Ohio, Pennsylvania and Virginia. The bipartisan group signals that enforcement of the existing judgment, rather than a new pharmaceutical policy, is the central issue. The next important step will be Shkreli’s response and the court’s decision on contempt.
The ruling could also clarify how courts monitor long-term behavioral injunctions after the original case ends. Effective enforcement may require financial records and digital evidence that did not exist when older industry bans were designed, especially when public commentary and personal investment occur on the same platform.
Source: New York Attorney General’s October 13 contempt-motion summary. Reporting reviewed October 14, 2026.