Why is Martin Shkreli being sued? Everything to know about the lawsuit over rare Wu-Tang Clan album streaming

A federal judge has temporarily barred investor-entrepreneur Martin Shkreli from streaming or disseminating copies of a rare Wu-Tang album. The order comes after the digital art collective, PleasrDAO sued the "pharma bro" on Monday, June 10, 2024, accusing him of coping and playing the album without permission.

Judge Pamela Chen made the ruling on Tuesday in favor of PleasrDAO, writing-

"Plaintiff will suffer immediate and irreparable injury—namely, erosion of the Album’s uniqueness as an original work of art."

Judge Chen added that the plaintiff "is likely to succeed on the merits" of the complaint "or raise significantly serious questions going to the merits of the Forfeiture Order, violations of the Defend Trade Secrets Act (and) misappropriation of trade secrets.”

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Martin Shkreli brought the Wu-Tang Clan album in 2015 after winning it in a bid at an auction

Wu-Tang Clan is a musical collective formed in 1992 and many credit them with revitalizing the East Coast hip-hop genre. Its members include RZA, Method Man, and Masta Killa. They recorded their seventh studio album, Once Upon a Time in Shaolin, in secret and created only one physical copy of the album with no ability to download or stream it.

The copy was auctioned in 2015 with the legal stipulation that the album was not to be duplicated or commercially exploited until 2103. Per XXL, citing court documents, Martin Shkreli purchased the album in question, Once Upon a Time in Shaolin, for $2 million in 2015 (he was the winning bidder). He lost the album after a federal court seized all his assets following his security fraud conviction.

Per a May 2024 article by The Guardian, the plaintiff purchased the rare album in two separate transactions, totaling $4.75 million (in 2024 and 2021) to make it available to the public. Because of legal restraints barring them from releasing the album, PleasrDAO spokesperson Jamis Johnson suggested the album can be played at listening parties or exhibitions.

The second such private listening event of selected songs from the album is at a museum in Tasmania, Australia, in the second half of June 2024.

However, the suit claims Martin Shkreli unlawfully made copies of the album and threatened to release them to the public. It mentions previous tweets (April 2024) by Shkreli claiming, "LOL i have the mp3s you moron," and "i can just upload the mp3s if you want?"

Just a day before getting sued, Martin Shkreli took to X to say, "well @pleasrdao blocked me from their account so i think i will play the album on spaces now."

Per the prosecutors:

"The album was supposed to constitute the sole existing copy of the record, music, data and files, and packaging. It now appears, however, that Shkreli improperly retained copies of the data and files at the time of the forfeiture and has released and/or intends to release them to the public. "

The suit explained:

"(Martin Shkreli's) actions would cause PleasrDAO to incur significant monetary and irreparable harm, and give rise to numerous claims for relief under the forfeiture order and common law."

On June 11, Shkreli shared an X post reacting to the lawsuit, saying, "these super nerds are suing me. the least crypto ethos, whitest, least culturally relevant dorks good luck!" When a user (@ConcernedBuyGME) pointed out he was leaving a "trail of evidence," he replied, "It was literally allowed. It was their lack of diligence that is astonishing."

Martin Shkreli is notorious for drastically increasing (4000%) the prices of an antiparasitic drug, Daraprim, overnight in 2015. In 2017, the court found him guilty of misleading investors about the hedge funds and their performance, along with a conspiracy to manipulate shares of a drug company he founded. He got a seven-year prison sentence and received a fine of more than $70 million. He is also permanently banned from working in the pharmaceutical sector.

Judge Chen ordered Martin Shkreli, who is currently on supervised release, to appear before the court on June 25 and provide the plaintiff with an inventory of any copies of the album he has.