Pharmaceutical honcho Martin Shkreli has been banished to solitary confinement amid allegations he was running his drug company from federal prison using a contraband smartphone.

A person familiar with the matter told AP that the man known as "Pharma Bro" was moved to solitary confinement at the New Jersey facility on March 7 and will likely remain there while his alleged conduct is being investigated.

The US Bureau of Prisons told AP on March 8 that it was investigating whether Shkreli violated rules forbidding inmates from conducting business and possessing cellphones.

Shkreli's lawyer declined to comment. The Bureau of Prisons said it doesn't release information on an individual inmate's conditions of confinement.

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Shkreli, 36, is serving a seven-year sentence at a low-security prison complex about 65km from Philadelphia.

He was convicted in August 2017 of lying to investors in two failed hedge funds and cheating them out of millions.

The Wall Street Journal reported last month that Shkreli has used a cellphone to call the shots at his drug company, Phoenixus AG, posting regularly to social media and even firing the company's chief executive.

The punishment for inmates caught with cellphones depends on how the case is handled.

If it's prosecuted in court, a conviction could tack on up to an extra year of prison time.

Within the inmate discipline programme, having a cellphone is considered a "greatest severity level" offence and carries sanctions ranging from loss to privileges to up to a year in solitary confinement.

In Shkreli's case, he could face more punishment if he's also found to have conducted business while locked up.

Other than the alleged cellphone flap, Shkreli has been pretty well behaved. His only other violations were for refusing an order and being absent from an assignment in May 2018, inmate disciplinary records show.

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Shkreli's securities fraud case stemmed from his role managing MSMB Capital Management and MSMB Healthcare between 2009 and 2014. It was unrelated to the 2015 furore he caused when he raised the price by more than 5000 per cent of a drug used to treat an infection that occurs in some Aids, malaria and cancer patients.

-AP