Shkreli has days to decide whether to take stand at fraud trial

Martin Shkreli has just days to decide whether to testify in his defense at his fraud trial.

Prosecutors are expected to rest their case against the Retrophin founder by the middle of this week. Then Shkreli and his lawyers must make a choice that could prove to be the trial’s most compelling turning point: Will he take the risk that his eccentric personality may alienate jurors as he tries to offer an innocent explanation for his investment decisions?

“If Shkreli takes the stand, it would be a massive gamble — and quite possibly a game-ending strategic blunder,” said James Goodnow, an attorney at Fennemore Craig who is not involved in the case. “All it would take is one sarcastic eye roll, one snooty comment, and that’s it — he will have lost the jurors and his chances for acquittal.”

Shkreli isn’t required to testify, and his lawyer, Benjamin Brafman, has been silent on whether he will take the witness stand. John McCabe, a senior consultant with Decision Analysis, a trial advisory firm in Los Angeles who isn’t involved in the case, said it would be a risky move.

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McCabe said Shkreli might implicate himself or turn jurors against him. On the other hand, Brafman may want to use Shkreli’s testimony to play up his client’s quirks, which has been a key part of the defense.

“He could provide information that other witnesses can’t provide, and thoroughly explain his thought process around his actions and the allegations, if he can do it with a certain amount of humility,” McCabe said. “He doesn’t seem like the sort of person who could do that.”

Should Shkreli testify, he will also open himself to hostile questioning from prosecutors, who may use his own comments — on Twitter and in a 2015 meeting he had with the government — to cross-examine him. He’s kept a regular presence on social media since testimony got under way.

Shkreli, 34, is accused of operating biotech firm Retrophin and his hedge funds as Ponzi schemes. Prosecutors say that after the funds imploded in 2011, Shkreli took investors’ money without their permission to start Retrophin, and later used $11 million from the drug company to repay the funds’ investors. He faces as long as 20 years in prison if convicted.

Prosecutors last week sought to show jurors documents that included what they said were sham Retrophin consulting agreements designed to repay investors who had lost money in Shkreli’s ventures. The defense objected, saying prosecutors should be required to call the investors to the witness stand before introducing the agreements.

One investor was Alan Geller, a retired oil trader. Brafman indicated in court papers that the defense would welcome Geller’s testimony, saying that he provided real consulting services by serving as Shkreli’s “life coach,” and made millions of dollars from his investments with Shkreli.

Chris Dolmetsch and Misyrlena Egkolfopoulou are Bloomberg writers. Email: cdolmetsch@bloomberg.net, megkolfopoul@bloomberg.net