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The Federal Trade Commission and attorneys general from seven states, including New York and California, have asked a federal judge to hold Martin Shkreli in contempt for allegedly violating his lifetime ban from the pharmaceutical industry. Since 2022, Shkreli has been banned after receiving a seven-year prison sentence for fraud related to hiking the price of the anti-parasitic drug Daraprim by over 4,000 percent. The complaint alleges he has "flagrantly and repeatedly" broken the ban by trading stock in dozens of drug companies and discussing the industry during livestreams on social media.

The FTC and the states seek to force Shkreli to sell all his pharmaceutical company stocks and pay a fine equal to his profits from these trades. They are also requesting clear consequences for future violations, which could include further financial penalties and incarceration. FTC Commissioner Mark Meador stated that Shkreli chose to disregard the order after leaving prison by actively influencing pharmaceutical companies through public commentary. Shkreli responded by saying he was surprised by the filing and suggested the move resembles limiting free speech under New York Attorney General Letitia James, though not from his own administration’s FTC.

The legal filing outlines four specific phases of alleged violations involving trading competitions and shorting biotech firms in 2022, 2024, 2025, and a challenge beginning in June 2026 with a $10 million account. During livestreams, Shkreli showed his accounts on screen and predicted clinical trial outcomes. In 2025, he told viewers about a "magic trick" where he could find stocks to short regardless of his trades. Later that year, he advised shorting one pharmaceutical company’s stock, which subsequently dropped 17 percent. The filing notes that Shkreli admitted other accounts exist but claimed he would not show them because he knew federal agents were watching.