A final court order does not necessarily mean an end to the involvement of state attorneys general (AG) in an enforcement action. As a recent filing shows, state AGs are now treating failure to comply with post-judgment permanent injunctions as standalone contempt actions.

On October 13, 2026, the Federal Trade Commission (FTC) and seven states moved in the Southern District of New York for an order to show cause why Martin Shkreli, founder of the now defunct Vyera Pharmaceuticals LLC, should not be sanctioned and held in civil contempt for violating a February 4, 2022, permanent injunction that banned him from participating in the pharmaceutical industry for life.[1] Plaintiffs allege that Shkreli has violated the ban “routinely” by continuing to have ownership interests in numerous pharmaceutical companies and by influencing the prices of company stocks through his public commentary on social media.[2]

Background: The Initial Action and Permanent Injunction

On January 27, 2020, the FTC and the New York AG sued Vyera Pharmaceuticals, its parent company Phoenixus AG, Martin Shkreli (founder of Vyera), and Kevin Mulleady (CEO of Vyera) for injunctive and other equitable relief. Six more states later joined. According to the complaint, after acquiring the lifesaving drug, Daraprim, in August 2015, the defendants raised its price from $17.50 to $750 per tablet.[3] They then allegedly shielded that price from generic competition by restricting distribution so generic makers could not obtain the samples needed for FDA bioequivalence testing, and by locking up the two most viable suppliers of the drug’s active ingredient through exclusive agreements.[4]

Vyera and Mulleady settled on the eve of trial. Shkreli proceeded with trial where Judge Denise Cote found him individually liable under Sections 1 and 2 of the Sherman Act and parallel state laws. The court found that Shkreli’s conduct delayed the entry of generic competition by at least eighteen months and generated over $64 million in profits for him and his company.[5]

On February 4, 2022, the court issued a permanent injunction that imposed on Shkreli a lifetime ban from directly or indirectly participating in the pharmaceutical industry. It cited conduct that was “egregious, deliberate, repetitive, long-running, and ultimately dangerous.”[6] The order also required Shkreli to pay $64.6 million in excess profits, to submit verified annual compliance reports for at least 10 years, and to make himself and his records available to regulators on five days’ notice.[7] The order expressly provides that Shkreli’s public statements about a pharmaceutical company are deemed an action taken to influence or control that company if he “intended the statement to have that effect or if a reasonable person would conclude that the statement has that effect.”[8] The Second Circuit affirmed the injunction in January 2024.[9]

What the Contempt Motion Alleges

On October 13, 2026, the FTC and state AGs from New York, California, Illinois, North Carolina, Ohio, Pennsylvania, and Virginia moved for an order to show cause why Shkreli should not be held in civil contempt and be sanctioned for violating the court’s permanent injunction that bars him “for life from directly or indirectly participating in any manner in the pharmaceutical industry.”[10] Plaintiffs allege that Shkreli specifically violated the provisions prohibiting him from “acquiring or holding an Ownership Interest in a Pharmaceutical Company” and “taking any action to directly or indirectly influence or control the management or business of any Pharmaceutical Company.”[11]

Under Second Circuit precedent, a court may hold a party in civil contempt for failing to comply with an order if: (1) the order is clear and unambiguous, (2) proof of noncompliance is clear and convincing, and (3) the party has not diligently attempted to comply in a reasonable manner.[12] The FTC and state AGs lean on the Second Circuit’s affirmance that the injunction is sufficiently “specific and definite” to satisfy the first element.[13] Relying largely on Shkreli’s own YouTube livestreams and social media posts, they argue that the second and third elements are met because Shkreli possessed ownership interests in more than 60 pharmaceutical companies, and that Shkreli intended his public commentary on social media and livestream videos to move prices, noting that one company’s stock fell 17% right after he announced his short.[14]

In addition to asking that Shkreli be held in civil contempt and sanctioned, the FTC and state AGs have also asked for (1) divestiture of all pharmaceutical holdings; (2) a fine equal to trading profits since February 4, 2022, with no offset for losses, plus prejudgment interest; (3) a sworn accounting and financial statement, verified by an auditor at Shkreli’s expense; (4) escalating consequences for continued or future violations, including additional fines and incarceration; and (5) an order that Shkreli not destroy any potential evidence relating to his past, present, or future violations of the permanent injunction.[15]

Why This Matters

Continuous monitoring. The motion comes more than four years after the permanent injunction, showing that an individual’s obligations under a court order do not lapse when the legal proceeding ends. States and government entities may regularly monitor for conduct that violates permanent injunctions they have pursued and won. Statements from state AGs reflect this posture. New York AG Letitia James stated that “[a] court-ordered lifetime ban isn’t a suggestion,” and that her office is “going back to court to put a stop to [Shkreli’s] latest illegal behavior.”[16] Pennsylvania AG Dave Sunday echoed that message, stating, “[a] court-ordered industry ban is not a suggestion, it is a legal obligation” and that plaintiffs will “ensure Shkreli faces consequences” if he has violated the terms of the injunction.[17]

Public-source detection. The alleged violations were found largely through public conduct, namely livestreams and social media. According to James, Shkreli “regularly livestreams his trading activity, posts publicly on social media about his trades and analysis, and brags about profits he’s made from trading pharmaceutical stocks.”[18] Regulators may be tuning into social media and public internet commentary to discover noncompliance, rather than relying solely on periodic compliance reports and monitorships.

Mechanism for equitable relief. Under the theory that a violator should not profit from wrongful conduct, the proposed sanctions include disgorgement of profits without offset for losses from violative trades, prejudgment interest, and fines. In the initial action, the FTC did not have statutory authority to obtain monetary relief such as restitution and disgorgement; however, plaintiffs argue, citing Fourth and Eleventh Circuit precedent, that this limitation does not apply to contempt actions seeking sanctions for violating an existing injunction.[19] If this argument is accepted, contempt actions may be a tool used by federal and state regulators to recover money they may not have had authority to recoup in the original enforcement action.

Potential future action. The “do not destroy” provision in the contempt filing serves as a warning that further action may be brought by the FTC and the states after court ordered obligations are imposed.

The contempt filing is a reminder that compliance with a court order is a continuing obligation, and regulators can and do police it. Parties subject to permanent injunctions, consent orders, and similar judgments should periodically review the scope of their obligations, including restrictions on indirect conduct and public statements, and should assume that public activity may be reviewed by regulators for compliance.

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[1] Press Release, Fed. Trade Comm’n, “FTC, States Ask Federal Court to Hold Martin Shkreli in Contempt for Allegedly Violating Lifetime Ban from Pharmaceutical Industry” (Oct. 13, 2026), https://www.ftc.gov/news-events/news/press-releases/2026/10/ftc-states-ask-federal-court-hold-martin-shkreli-contempt-allegedly-violating-lifetime.

[2] Mem. of Law in Supp. of Pls.’ Mot. for Order to Show Cause Why Def. Martin Shkreli Should Not Be Held in Civil Contempt at 1, FTC v. Vyera Pharms., LLC, No. 1:20-cv-00706 (DLC) (S.D.N.Y. Oct. 13, 2026), ECF No. __, https://oag.ca.gov/system/files/attachments/press-docs/shkreli-memoflaw-isomot.pdf [hereinafter Br.].

[3] Compl. ¶ 83, FTC v. Vyera Pharms., LLC, No. 1:20-cv-00706 (DLC) (S.D.N.Y. Jan. 27, 2020), ECF No. __, https://www.ftc.gov/system/files/documents/cases/161_001_vyera_pharm_-_redacted_complaint.pdf [hereinafter Compl.]..

[4] Id,¶¶ 4 –7.

[5] Op. & Order at 6–7, FTC v. Vyera Pharms., LLC, No. 1:20-cv-00706 (DLC) (S.D.N.Y. Jan. 14, 2022), ECF No. 865, https://www.ftc.gov/system/files/documents/cases/865_2022.01.14_opinion_and_order.pdf [hereinafter Op.].

[6] Id,at 124.

[7] Order for Permanent Inj. & Equitable Monetary Relief §§ III–V, FTC v. Vyera Pharms., LLC, No. 1:20-cv-00706 (DLC) (S.D.N.Y. Feb. 4, 2022), ECF No. 876, https://oag.ca.gov/system/files/attachments/press-docs/876order-permanent-injunction-and-equitable-monetary-relief.pdf [hereinafter Perm. Inj.].

[8] Id.¶ II.D.

[9] Fed. Trade Comm’n v. Shkreli, No. 22-728, 2024 WL 1026010 (2d Cir. Jan. 23, 2024) (summary order)

[10] Br. at 1

[11] Id.

[12] See Paramedics Electromedicina Comercial, Ltda. v. GE Med. Sys. Info. Techs., Inc., 369 F.3d 645, 655 (2d Cir. 2004); King v. Allied Vision, Ltd., 65 F.3d 1051, 1058 (2d Cir. 1995); Br. at 20.

[13] Br. at 20–21.

[14] Id.at 21 –23.

[15] Id.at 25 –-27.

[16] Press Release, N.Y. State Off. of the Att’y Gen., “Attorney General James Urges Court to Punish Martin Shkreli for Brazenly Violating Lifetime Ban from Pharmaceutical Industry” (Oct. 13, 2026), https://ag.ny.gov/press-release/2026/attorney-general-james-urges-court-punish-martin-shkreli-brazenly-violating.

[17] Press Release, Pa. Off. of Att’y Gen., “Attorney General Sunday Seeks Contempt Finding Against Martin Shkreli for Allegedly Violating Lifetime Pharmaceutical Industry Ban” (Oct. 13, 2026), https://www.attorneygeneral.gov/taking-action/attorney-general-sunday-seeks-contempt-finding-against-martin-shkreli-for-allegedly-violating-lifetime-pharmaceutical-industry-ban/.

[18] Press Release, N.Y. State Off. of the Att’y Gen., supra note 16.

[19] Br. at 25 n.130

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Troutman Pepper Locke State Attorneys General Team

	Ashley Taylor – Co-leader and Firm Vice Chair Ashley is co-leader of the firm’s nationally ranked State Attorneys General practice, vice chair of the firm, and a partner in its Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group. He helps his clients navigate the complexities involved with multistate attorneys general investigations and enforcement actions, federal agency actions, and accompanying litigation.
	Clay Friedman – Co-leader Clay co-leads the firm’s State Attorneys General practice and is nationally ranked by Chambers USA for AG Government Relations and in Best Lawyers for Advertising Law. He has dedicated his entire career to state attorney general and federal work, serving for nearly a decade in a senior role and more than 25+ years in private practice. Clay focuses his practice on helping industry-leading companies mitigate the risks associated with state and federal regulatory investigations and associated litigation.
	Chris Carlson Chris advises clients on regulatory, civil, and criminal investigations and litigation. With a background as an assistant attorney general, he provides practical guidance to clients with matters involving state attorneys general and federal regulatory agencies.
	Lauren Fincher Lauren has vast experience handling state attorneys general investigations, navigating complex regulatory compliance matters, and providing strategic counsel in enforcement actions across various industries. She helps clients manage high-stakes regulatory matters and guides them through complex legal landscapes.
	Stephen Piepgrass Stephen leads the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, representing clients in single and multistate enforcement actions, including inquiries and investigations involving state attorneys general and other state and federal governmental enforcement bodies including the CFPB and FTC. He regularly represents clients in highly regulated sectors such as financial services, emerging technologies, health care, insurance, and education.
	Michael Yaghi Mike handles high-profile investigations led by state attorneys general, the FTC, and other federal and state regulatory bodies. He assists clients through these complex government inquiries, assisting them throughout the entire life cycle of investigations, from regulatory enforcement through formal litigation.
	Matthew J. Berns Drawing on his experience in senior leadership roles in the New Jersey Attorney General’s and Governor’s Offices and as a trial attorney for the U.S. Department of Justice, Matt provides an insider’s perspective when guiding clients through complex government investigations, litigation, and other actions.
	Jeff Johnson Jeff helps clients navigate complex regulatory and litigation challenges with local, state, and federal authorities. His clients benefit from his decade of broad litigation experience, understanding of emerging state and federal regulatory issues, and strong relationships with attorneys general across the U.S. In addition to handling cases from trial through state or federal appeals, Jeff serves as amicus counsel in advancing legal rules to support his clients’ vital interests.
	Jay Myers Jay assists clients in heavily regulated industries, including health care, energy, insurance, emerging industries, and data privacy. He provides both regulatory legal advice and government relations strategies. Jay’s past and current clients include Fortune 10 companies, startups, nonprofits, industry associations, and advocacy groups. Recognizing that state government matters are often complex and multifaceted, he utilizes regulatory guidance, government advocacy, or both in tandem to deliver tailored solutions for each client’s unique needs.
	Zoe Schloss Zoe represents clients in litigation and government investigations. As former deputy attorney general for the Delaware Department of Justice, she is an experienced litigator who understands the enforcement priorities that impact her clients. Zoe works with individuals and corporate entities in highly regulated industries, including financial services, health care, and energy.
	Jessica Birdsong Jessica is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice Group. She received her J.D. from the University of Richmond School of Law, magna cum laude, where she served as associate articles editor of the Journal of Law & Technology.
	Sydney Goldberg Sydney is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group. She advises clients on regulatory compliance and state attorney general (AG) investigations in highly regulated industries, including health care and life sciences. She routinely helps clients navigate alcohol compliance and licensing issues, helping proactively manage regulatory risk.
	Troy Homesley Troy is an accomplished litigator who has represented and defended clients across a wide range of complex, high-stakes disputes at both the trial and appellate levels. He has represented technology companies, business executives, law firms, investment funds, high-ranking federal officials, international non-profits, and asylum seekers. Troy draws on his broad litigation experience to advise clients before litigation arises, while claims are pending or threatened, and leading up to and through trial and appeals.
	Namrata Kang Namrata (Nam) is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, based in the Washington, D.C. office. She routinely advises clients on a wide variety of state and federal regulatory matters, with a particular emphasis on state consumer protection laws relating to consumer financial services and marketing and advertising. Nam’s experience transcends multiple industries, including financial services, telecommunications, media, and sports betting.
	Michael Lafleur Michael is an associate in the firm’s Regulatory Investigations, Strategy, and Enforcement Practice Group. Based out of the firm’s Boston office, Mike has deep experience in litigation, investigations, and other regulatory matters involving state-level regulators and state attorneys general.
	William LaRosa Bill represents clients in complex regulatory investigations, state attorneys general matters, and enforcement proceedings. He draws on his experience as a former assistant U.S. attorney and as a private-sector litigator advising corporations in high-stakes litigation and regulatory investigations, including multistate AG investigations.
	Lane Page Lane represents financial institutions and other clients in federal and state regulatory investigations and complex civil litigation. He is particularly focused on consumer protection and fair lending issues.
	Dascher Pasco Dascher provides strategic counsel and representation to clients navigating regulatory compliance, enforcement, and high-stakes litigation. She regularly represents clients in both single and multistate state attorney general (AG) investigations and enforcement actions, as well as before other state enforcement bodies and local government agencies.
	Kyara Rivera Rivera Kyara is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice Group. She received her J.D. from the University of Richmond School of Law, cum laude, where she served as publications and online editor of the Public Interest Law Review.
	Timothy Shyu Timothy advises clients on regulatory compliance and enforcement in highly regulated industries, including health care and life sciences, data privacy and cybersecurity, and emerging technology. He assists companies in navigating complex investigations and enforcement actions, helping them mitigate regulatory risk proactively.
	Trey Smith Trey focuses his practice on representing and advising regulated utilities before state public utility commissions. He routinely helps clients obtain certificates of public convenience and necessity for transmission infrastructure. In this role, Trey works with his clients’ subject-matter experts to manage administrative proceedings, including by preparing initial filings; responding to discovery requests; drafting rebuttal testimony; and litigating any disputed issues.
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	Stephanie Kozol Stephanie is Troutman Pepper Locke’s senior government relations manager in the state attorneys general department.