Martin Shkreli, the CEO of an American drugs company who hiked the price of life-saving HIV-related drugs from $13.50 to $750, was reportedly arrested on securities fraud charges relating to a firm that he founded.

He was charged with illegally taking stock from Retrophin Inc., a biotechnology firm he started in 2011, and using it pay off debts from unrelated business dealings, Bloomberg said.

The Eastern District of New York department of the US Attorney's Office did not immediately respond to requests for comment.

Shkreli was ousted from Retrophin in 2014 and sued by its board.

A spokeswoman for Retrophin told the Independent that it could not comment on the arrest until it has reviewed the charges.

“The Directors of Retrophin replaced Martin Shkreli as Chief Executive Officer more than a year ago because of serious concerns about his conduct. Following his departure, the company authorized an independent investigation of Mr. Shkreli’s conduct, publicly disclosed its findings, and has fully cooperated with the government investigations into Mr. Shkreli," the spokeswoman said.

USA: Pharma CEO Martin Shkreli arrested on fraud charges

After his defunct hedge fund, MSMB Capital, lost millions, Shkreli allegedly made "secret payoffs" and set up "sham consulting arrangements", Bloomberg said.

Shkreli earned the nickname "most hated man on the internet" after he bought the rights to Daraprim, a drug used to treat those with weakened immune systems caused by illnesses like HIV. He then hiked up the price of the drug by 5,000 per cent from $13.50 per pill to $750.

At first, he said he would lower the price of Daraprim, but later changed his mind. When Hillary Clinton said that a 10 per cent price reduction was not enough, he responded with one word: "lol".

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He later told investors at a Forbes summit in New York: “I probably would have raised the price higher. My investors expect me to maximize profits.”

Shkreli is facing a lawsuit from Retrophin for allegedly misusing company funds. In August, Retrophin sued, saying that Shkreli had engineered transactions between investors in MSMB and the biotechnology firm.