New York and federal regulators say pharmaceutical stock trades and livestreams violated a lifetime industry ban. They want an audit, forced stock sales and financial sanctions.

Attorney General Letitia James is seeking Martin Shkreli contempt sanctions, joining federal regulators and six other states in asking a judge to enforce his lifetime ban from the pharmaceutical industry. The October 13 action targets years of stock trading and online broadcasts that the coalition says violated a federal court order.

The request does not mean a judge has already found Shkreli in contempt. It asks the U.S. District Court for the Southern District of New York to review the alleged violations and impose measures intended to secure compliance. The underlying antitrust judgment and lifetime ban are separate from the new contempt allegations.

“A court-ordered lifetime ban isn’t a suggestion,” James said in the Attorney General’s announcement.

What are James and the FTC asking the court to do?

The Federal Trade Commission and attorneys general of New York, California, Illinois, North Carolina, Ohio, Pennsylvania and Virginia want the court to require Shkreli to give up pharmaceutical company holdings and account for his trading.

Their memorandum supporting the contempt motion seeks several related steps:

• A complete, sworn accounting of pharmaceutical stock trades since the February 4, 2022 injunction, along with a sworn financial statement.
• An independent auditor, paid for by Shkreli, to check that accounting and determine trading profits.
• Divestment of ownership interests in pharmaceutical companies.
• A fine tied to profits from prohibited pharmaceutical trading, without subtracting losses on other prohibited trades, plus interest.
• Escalating consequences for continued noncompliance, potentially including further fines and incarceration.

The filing also asks for an order protecting evidence from destruction. These are requests from the plaintiffs. Their scope and whether they should be granted remain matters for the court.

Why was Shkreli banned from the pharmaceutical industry?

The dispute grows out of the Daraprim antitrust case. Under Shkreli’s leadership, Turing Pharmaceuticals, later called Vyera, acquired the drug and raised its price from $17.50 to $750 per pill in 2015.

The case concerned more than that price increase. The court found an unlawful scheme that restricted generic competition, including access to materials that potential competitors needed to develop alternatives.

In January 2022, the court found Shkreli liable for violating federal and state antitrust laws. The permanent injunction followed in February, banning him for life from direct or indirect participation in the pharmaceutical industry. The judgment also required payment of $64.6 million, subject to an offset described in the order.

According to the current court memorandum, the Second Circuit upheld the injunction in January 2024. The Supreme Court declined to review the case in October 2024. The Phoenix previously covered that Supreme Court development.

Shkreli’s prison sentence for separate securities fraud charges should not be confused with this civil antitrust case. The coalition says the trading activity at issue began after his release from prison in May 2022.

What stock trading do regulators describe?

The memorandum organizes Shkreli’s public activity into four periods. It relies on livestreams, social media posts and other exhibits to argue that the conduct was repeated rather than isolated.

A 2022 online trading competition

The coalition says Shkreli started a trading competition with another YouTube personality in July 2022, using an initial $50,000 deposit. According to the filing, his displayed portfolio included numerous pharmaceutical companies, and he discussed those businesses during broadcasts.

The significance, plaintiffs argue, is that the injunction bars ownership interests in pharmaceutical companies. They say buying shares falls within that restriction even when someone is acting as an investor rather than as a company executive.

Cassava trading in 2024

The filing describes later broadcasts analyzing stocks, including Cassava Sciences, which was developing an Alzheimer’s disease treatment. Plaintiffs say Shkreli built a short position in Cassava and publicly discussed why he expected its stock to fall.

Short selling is a way to seek profit from a declining share price. The memorandum says his displayed Interactive Brokers account value rose from roughly $138,200 to $841,000 around Cassava’s announcement of unsuccessful study results.

Those account figures are part of the coalition’s evidence. They are not a court-approved calculation of the total profits that might be subject to sanctions. The requested audit is meant to establish a fuller record.

Later trades and a new account

The coalition also describes pharmaceutical trades during 2025. It says a short position involving Capricor went against Shkreli after positive clinical trial results, and he subsequently described the trading account as exhausted.

In June 2026, according to the filing, broadcasts showed a new account with a $10 million starting balance. Plaintiffs say pharmaceutical trading continued and argue that the publicly visible record may capture only part of his activity.

The filing does not establish that the entire displayed balance was profit, nor that all of the money was Shkreli’s personal wealth. Those distinctions matter when assessing the requested financial accounting.

Why do online comments matter in this case?

Plaintiffs point to two parts of the injunction: restrictions on holding pharmaceutical company ownership interests and restrictions on actions intended to influence or control those companies’ business.

They argue that Shkreli’s trading and public commentary violate both. The coalition further contends that broadcasts can influence followers’ investment decisions and affect companies’ ability to raise money.

That is the plaintiffs’ legal position, not a new judicial finding. The materials reviewed for this article did not include Shkreli’s response to the October 13 motion. Readers should not interpret that absence as an admission or assume what arguments he may present.

What does this mean for Mohawk Valley readers?

This is a statewide enforcement story involving prescription drug competition and compliance with court orders. The announcement does not identify a Utica-area company, local defendant or new program for Mohawk Valley patients.

It also does not announce a refund application or a direct payment for people who purchased Daraprim. The requested trading-related sanction is distinct from the earlier antitrust judgment.

For readers following drug costs and consumer protection, the central question is whether a broad industry ban can be enforced against stock ownership and online activity years after it was issued. The court’s treatment of the evidence will determine the next step in this case.

What happens next?

The coalition has requested an order requiring Shkreli to explain why he should not be held in civil contempt. Its memorandum describes proposed sanctions as tools to end alleged violations and compel future compliance.

No hearing date or new contempt decision is established by the announcement and memorandum reviewed here. Potential incarceration is a requested consequence for noncompliance, not an announced prison sentence.

Has Shkreli already been found in contempt in this new action?

The October 13 materials announce a request for that finding. They do not announce that the court has granted it.

Would trading losses reduce the requested fine?

The coalition asks the court to calculate the sanction from profits without offsetting losses on other prohibited trades. Whether to accept that approach is for the judge to decide.

Readers can examine the official release and court memorandum to follow the allegations and requested relief directly. Watch for a court response before treating the proposed sanctions as an outcome.