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Investors Sue Company Rescued by Shkreli for Return of $5 Million

Submitted by jhartgen@abi.org on

Investors who backed a biotechnology company led by executive Martin Shkreli are suing to get back the $5.4 million they had invested just hours before his arrest, Reuters reported yesterday. Shkreli took control of KaloBios Pharmaceuticals Inc in November, saving the company from closing down. He became its chief executive on Nov. 20. As part of Shkreli's rescue, the company reached a deal with three individuals and two funds to invest $5.4 million in it under an agreement that KaloBios said was completed on Dec. 16. On Dec. 17, Shkreli was arrested for allegedly engaging in a Ponzi-like scheme at his former hedge fund and Retrophin Inc, a pharmaceutical company he previously headed. KaloBios' outside counsel, Evan Greebel, was also arrested, and on Dec. 29 KaloBios filed for bankruptcy.