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This constant stream of Theranos might be viewed by some on the surface as beating a dead horse... but every article is new news of their shenanigans. And the

This constant stream of Theranos might be viewed by some on the surface as beating a dead horse... but every article is new news of their shenanigans. And the most important bit - it seems like nothing has changed. It seems like they are continuing on the same path, as it seems like Elizabeth Holmes is completely out of touch with reality. Obviously this saga has thus far been negative for many of those involved - but I'm selfishly enjoying following the story. I'm curious to see how this ends. Theranos has hired some very good attorneys and I assume Walgreens and the consumer class actions will be interesting cases. One question: If Theranos needs to protect itself from a criminal / civil SEC investigation, do the Theranos executives get to use investor funds to defend themselves? If so, who does that help?

GavinMcG 10y ago
I would assume it can use investor funds. Presumably, if a defense is a rational choice compared to a settlement, the use of investor funds helps avoid the loss of even more investor funds.
- tuna-piano 10y ago
  I'm referring to the open criminal investigations against Theranos: http://www.bloomberg.com/news/articles/2016-04-18/theranos-is-under-investigation-by-sec-u-s-attorney-s-office http://www.bloomberg.com/news/articles/2016-04-18/theranos-i... Is this investor money being used to defend against a suit about defrauding investors?
  - otl1248 10y ago
    Companies frequently defend themselves against shareholder lawsuits, and naturally that money would otherwise provide value for the shareholders. Also, if the SEC fines them the (current) investors will basically be punished!
    - marcoperaza 10y ago
      Oh fascinating, I hadn't thought about this before. So if the plaintiffs win a shareholder lawsuit, they're winning money at the expense of all of the other shareholders? And what about a class-action by all of the shareholders (is that even possible)? That'd just be the shareholders suing themselves? I guess that'd just be a forced liquidation/dividend in effect, right?

GavinMcG 10y ago

I would assume it can use investor funds. Presumably, if a defense is a rational choice compared to a settlement, the use of investor funds helps avoid the loss of even more investor funds.

tuna-piano 10y ago
I'm referring to the open criminal investigations against Theranos: http://www.bloomberg.com/news/articles/2016-04-18/theranos-is-under-investigation-by-sec-u-s-attorney-s-office http://www.bloomberg.com/news/articles/2016-04-18/theranos-i... Is this investor money being used to defend against a suit about defrauding investors?
- otl1248 10y ago
  Companies frequently defend themselves against shareholder lawsuits, and naturally that money would otherwise provide value for the shareholders. Also, if the SEC fines them the (current) investors will basically be punished!
  - marcoperaza 10y ago
    Oh fascinating, I hadn't thought about this before. So if the plaintiffs win a shareholder lawsuit, they're winning money at the expense of all of the other shareholders? And what about a class-action by all of the shareholders (is that even possible)? That'd just be the shareholders suing themselves? I guess that'd just be a forced liquidation/dividend in effect, right?