For Martin Shkreli and others, 'no comment' is not in the script

It used to be that money managers and entrepreneurs charged with a crime or civil securities fraud would keep their mouths shut and routinely refer any questions to their lawyers.

But in the age of social media, those days are gone. For some media-savvy defendants there is a new script: They jump on twitter to tell the world they are innocent, even though lawyers think doing so is a terrible and legally risky idea.

Two days after the pharmaceutical executive Martin Shkreli was arraigned on federal securities fraud charges, which accused him of defrauding investors in his former hedge funds and looting a drug company he once ran, he proclaimed his innocence in a Twitter post after pleading not guilty in court.

"I am confident I will prevail," Shkreli, 32, wrote to Twitter followers on Saturday. On Tuesday, he wrote, "I'm not a criminal" in response to a comment on Twitter.

Shkreli, best known for raising the price of a decades-old drug by 5,000 per cent and later paying $2 million to buy the only known copy of an album by the rap group Wu-Tang Clan, has tried to present a carefree attitude online since his arrest on Thursday.

He has also posted streaming videos of himself on YouTube sitting at his computer - combing his hair, playing chess and strumming a guitar - and responding to comments from his supporters as if the possibility of going to prison were just a bump in the road.

Last spring, Lynn Tilton, a private equity executive, embarked on a similar public relations strategy after federal securities regulators filed a civil lawsuit that charged her with defrauding investors in distressed-debt securities managed by her firm, Patriarch Partners.

Tilton, 56, posted a video online defending herself and denying the charges and later used Twitter to attack the Securities and Exchange Commission's decision to bring her case before an administrative law judge, as opposed to filing the matter in federal court.

And in a twist on the strategy, Charlie Shrem, an early proponent of the digital currency Bitcoin and chief of the money exchange service BitInstant, gave a speech via Skype to a Bitcoin conference while under house arrest before he pleaded guilty in 2014 to aiding and abetting the operation of an unlicensed money transmitting business. Shrem, 26, has continued to post on twitter, with the assistance of some friends, from federal prison.

His twitter profile describes him as "Bitcoin pioneer & first felon." In April, shortly after beginning to serve his two-year sentence, Shrem posted, "I'm in prison for a victimless crime" and invited people to write to him.

It is a kind of do-it-yourself defence strategy for those naturally disposed to a certain amount of vanity and self-absorption, experts say. And it is gaining favour even though defence lawyers have counseled against it and warned that the strategy could backfire because some things defendants say can be used against them at trial or sentencing.

Dealing with outspoken clients has become increasingly normal, lawyers say, especially as many of these clients have cultivated online personas that extend beyond their day jobs.

Gregory Morvillo, a lawyer who specialises in representing white-collar defendants, says having a client who posts on Twitter is a "recipe for disaster."

"I am generally averse to my clients going out and speaking publicly, but the reality is there has been a seismic shift in how we communicate," said Morvillo, who represented Anthony Chiasson, a hedge fund manager whose conviction on insider trading charges was overturned by an appellate court.

Joshua B Newman, a New York-based entrepreneur charged in a criminal complaint by federal prosecutors with defrauding investors in a number of CrossFit training ventures, has referred on Twitter to having seen "better days" and quoted Abraham Lincoln saying, "Folks with no vices have very few virtues." The case is still pending.

Recently, Newman, 36, started a new online fitness training venture that makes no mention of the fraud charges against him but talks about the favourable media coverage he has received over the years.

Priya Chaudhry, Newman's lawyer, said in a statement, "We encourage our clients to right their ships quickly and permanently, so they can return to good, productive lives."

This new era of defiance on social media has led to the unusual situation in which the person charged with wrongdoing is the one doing the talking, while the lawyer is often the one to say no comment.

That has been the case with Shkreli's lawyers at the big law firm Arnold & Porter, which has repeatedly declined to comment on the charges against Shkreli.

Marc A Agnifilo, the lawyer who represented Shrem, said for clients who take to social media to defend themselves it "can feel good at the time", but it has the potential to undermine plea negotiations that might be taking place.

"We are in the age of oversharing," Agnifilo said.

©2015 The New York Times News Service