20 ms·

Theranos and David Boies Cut Legal Ties

128 points by dbcooper 10y ago

w1ntermute 10y ago
If you haven't read it, the previous article in the WSJ Theranos series, on the original whistleblower, is a riveting read[0]. I can't wait to see how this is portrayed on the big screen[1]. 0: http://www.wsj.com/articles/theranos-whistleblower-shook-the-companyand-his-family-1479335963 http://www.wsj.com/articles/theranos-whistleblower-shook-the... 1: http://www.vanityfair.com/hollywood/2016/06/jennifer-lawrence-theranos-elizabeth-holmes http://www.vanityfair.com/hollywood/2016/06/jennifer-lawrenc...
- akhilcacharya 10y ago
  We're still going with "Unicorn Blood", right?
- MengerSponge 10y ago
  A particularly relevant note from that: Shultz emailed Holmes directly, blowing her plausible deniability right out the window, probably.
downandout 10y ago
Lawyers are typically among the last to jump ship from corporate disasters, since they stand to gain the most from them. Usually they only do so when they don't think they will be paid, they have been asked by the company to do something unethical, or when they believe that their actions during the company's downfall may expose their own firm to liability. In this case it may be a combination of the three, but whatever happened, Theranos is toast and I suspect Elizabeth Holmes will be very lucky if she does not spend some time in prison over this.
- micaksica 10y ago
  > Theranos is toast and I suspect Elizabeth Holmes will be very lucky if she does not spend some time in prison over this. An elite, highly politically connected, young, blonde, Caucasian woman will not spend time in prison for a dubious charge of white collar crime. There is little to no hope of that in today's society, regardless of how damaging her actions are. Edit: I'd love to be proven wrong on this comment, but I don't have much faith that this will ever come to happen. It is laughable to think that the American justice system is actually neutral across races or socioeconomic lines. Also, I agree that Theranos is toast. I just think it will try to become toast somewhat quietly.
  - rbcgerard 10y ago
    Martha Stewart?
  - thucydides 10y ago
    We shall see.
  - imjk 10y ago
    I guess you've never heard of Martha Stewart then. I'm only joking of course.
  - dragonmum 10y ago
    > a dubious charge Given what has come out so far, is the charge of criminally misrepresenting the efficacy of the product really dubious?
    - deleted 10y ago
      [deleted]
  - downandout 10y ago
    It's called fraud, and she defrauded and embarrassed many of the people she is "connected" to. Despite your assertion to the contrary, many white people have gone to jail for fraud. I also don't think there is much behind-the-scenes lobbying happening on her behalf (in fact there may be some lobbying against her).
    - micaksica 10y ago
      IANAL, but federal criminal procedure requires more than just a smell of fraud to convict someone in a federal court. A Federal prosecutor either needs a political bone to pick or a pretty easy to convict case to push for charges. Federal prosecutors have limited time and pick things that either grant them political expediency or they believe that they have enough evidence that the person they are going after is going to end up convicted with some certainty. The problem here is not that Theranos has failed or has misrepresented the product, it's that Holmes personally needs to have been found to directly misrepresent the company in a fraudulent fashion. Her and Theranos can likely be sued (as civil cases require "preponderance of evidence") but I highly doubt you can prove fraud beyond a reasonable doubt unless there is a much greater scandal that is unearthed during an investigation. And that's probably not going to happen. So let's talk about a federal investigation of Theranos, then: this is someone who has had James Mattis, the current prime candidate for Secretary of Defense, for help and sits on the board of Theranos [1]. She is connected to most of the political elite (Kissinger et al, all of the VC/finance world.) If anyone can put down an FBI investigation on her person, it would be someone this well connected to organizations that the FBI themselves lean upon in some way or another. This is Washington, and let's be real, favors are favors. Helping one of these guys somewhere in some way buys you favors, and you may be able to trade to get the investigation off of your back. Furthermore, what stands to be gained by all of those on this board in power by prosecuting Holmes? It would tarnish the reputation of potential cabinet members and all others in Washington that "believed in" Holmes and her ideas. The political PR nightmare for these guys isn't worth the trouble of being involved in this. It becomes scandal for them. They would best see the company fade into irrelevance, and begin setting up the message that this is just another failed entrepreneurial case, of people making a moonshot and missing it. Tell Holmes it's OK, give her a powerful position in some healthcare think tank, and be on your way. Also, what message does it stand to give the American public that have been sold on this visionary? The PR storm told people here is a white, female college dropout who hit the Forbes list and achieved the American dream. Do you really want to start a news cycle where Holmes is now being thrown in prison? Do you want that message, especially when so much of Washington is connected to it? That's emotionally heartbreaking to many. So there's no bone to pick, if anything negative political blowback, an uncertain ability to prove Holmes herself defrauded people, and enough political power to tell the FBI to look at someone else. This is why I say there's little to no hope of her going to prison for this. Holmes knows what she is doing on that front, even if her visions didn't fully materialize. She has played the PR game pretty well up until this point, shoved her chips all in on the moonshot, and failed to deliver the goods. Frankly, I think she has thought all this through and her bets are on what I've said above. The question is whether or not this line of thinking is incorrect. I am armchairing it, and her life is on the line. [1] http://www.fiercebiotech.com/medical-devices/theranos-asked-military-general-for-help-tamping-down-misinformation-from-dod http://www.fiercebiotech.com/medical-devices/theranos-asked-...
- goodJobWalrus 10y ago
  > Boies Schiller was granted more than 300,000 shares valued at $4.5 million, based on a valuation of $15 a share at the time, this person said. yeah, they are not getting paid.
- andrewfong 10y ago
  From the article: > The law firm was paid in Theranos stock for its work on the patent case, according to a person familiar with the matter. Boies Schiller was granted more than 300,000 shares valued at $4.5 million, based on a valuation of $15 a share at the time, this person said. Wonder what the valuation's at now.
- diogenescynic 10y ago
  She'll never do a day. She knows all the right people to pull the right levers. The privilege of wealth.
sidi 10y ago
Google link to read the full article: https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0ahUKEwi4k6e_3MLQAhUr04MKHSAtA7MQFgggMAA&url=http%3A%2F%2Fwww.wsj.com%2Farticles%2Ftheranos-and-david-boies-cut-legal-ties-1479514351&usg=AFQjCNEMvPo1d3t1sfzJcPyAoC2Yk0FSDw&sig2=C0IfzcuiU8Zjd1yy-st7Lw https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&c...
- RickS 10y ago
  tip: the "web" link underneath the title does this automatically
  - fuzzfactor 10y ago
    observation: the "web" link underneath the title appears intended to do this automatically performance report: the "web" links usually fail (as in this case) completely when needed most no matter how much time you waste trying, but sidi's link works ideally instantly. Using a Tor browser.
    - curiousgal 10y ago
      I t didn't work on CHrome as well but opening it in an incognito window made it work for me.
debt 10y ago
it's unfortunate theranos didn't pan out. seems like a technology capable of what was claimed would be incredibly beneficial for diabetics.
- foobarian 10y ago
  Don't diabetics already have testing tech that works off tiny pinpricks? IIRC the holy grail for diabetics is testing without drawing blood.
  - trprog 10y ago
    >Don't diabetics already have testing tech that works off tiny pinpricks? Yep. Labs can do more comprehensive tests that some diabetics get done periodically but home testing kits work via a finger prick.
  - SilasX 10y ago
    Correct. Diabetics are only checking for a very narrow metric (glucose levels IIUIC), which is not very sensitive to interference from surface skin cells. That doesn't hold for most of the other things that Theranos was trying to make a test for.
- wavefunction 10y ago
  Certainly many as-yet fanciful technologies would be incredibly useful for us all.
bby 10y ago
fuck elizabeth
bitwize 10y ago
If David Boies -- Mr. SCO v. IBM -- cuts ties with you, that's a serious mic drop against your credibility as a company.
pseingatl 10y ago
Classic conflict of interest: Boies was not only the company's counsel, he was a director and his firm was a shareholder, his partner was Theranos' general counsel. The interests of the firm were to keep Theranos operating as a going concern, keep the contract with Walgreens, stop the federal investigation (Madoff and the SEC anyone?) and keep the money flowing. His partners' ambushing a suspected whistleblower was thuggery. Theranos was a Madoff-type operation because everyone thought that a former head of NASDAQ with a blackbox split/strike conversion strategy couldn't possibly be a fraudster. Theranos had a contract with Walgreens, was approved by Medicare, was a billion dollar company--how could it possibly be a snake oil vendor? But he was and they were. Boies tried to keep the game running as long as he could and who knows, maybe he drank the Theranos Kool-Aid as well, but now it is obvious that there's no there there and Theranos is doomed.

128 points by dbcooper 10y ago

If you haven't read it, the previous article in the WSJ Theranos series, on the original whistleblower, is a riveting read[0]. I can't wait to see how this is portrayed on the big screen[1]. 0: http://www.wsj.com/articles/theranos-whistleblower-shook-the-companyand-his-family-1479335963 http://www.wsj.com/articles/theranos-whistleblower-shook-the... 1: http://www.vanityfair.com/hollywood/2016/06/jennifer-lawrence-theranos-elizabeth-holmes http://www.vanityfair.com/hollywood/2016/06/jennifer-lawrenc...

akhilcacharya 10y ago
We're still going with "Unicorn Blood", right?
MengerSponge 10y ago
A particularly relevant note from that: Shultz emailed Holmes directly, blowing her plausible deniability right out the window, probably.

downandout 10y ago

Lawyers are typically among the last to jump ship from corporate disasters, since they stand to gain the most from them. Usually they only do so when they don't think they will be paid, they have been asked by the company to do something unethical, or when they believe that their actions during the company's downfall may expose their own firm to liability. In this case it may be a combination of the three, but whatever happened, Theranos is toast and I suspect Elizabeth Holmes will be very lucky if she does not spend some time in prison over this.

micaksica 10y ago
> Theranos is toast and I suspect Elizabeth Holmes will be very lucky if she does not spend some time in prison over this. An elite, highly politically connected, young, blonde, Caucasian woman will not spend time in prison for a dubious charge of white collar crime. There is little to no hope of that in today's society, regardless of how damaging her actions are. Edit: I'd love to be proven wrong on this comment, but I don't have much faith that this will ever come to happen. It is laughable to think that the American justice system is actually neutral across races or socioeconomic lines. Also, I agree that Theranos is toast. I just think it will try to become toast somewhat quietly.
- rbcgerard 10y ago
  Martha Stewart?
- thucydides 10y ago
  We shall see.
- imjk 10y ago
  I guess you've never heard of Martha Stewart then. I'm only joking of course.
- dragonmum 10y ago
  > a dubious charge Given what has come out so far, is the charge of criminally misrepresenting the efficacy of the product really dubious?
  - deleted 10y ago
    [deleted]
- downandout 10y ago
  It's called fraud, and she defrauded and embarrassed many of the people she is "connected" to. Despite your assertion to the contrary, many white people have gone to jail for fraud. I also don't think there is much behind-the-scenes lobbying happening on her behalf (in fact there may be some lobbying against her).
  - micaksica 10y ago
    IANAL, but federal criminal procedure requires more than just a smell of fraud to convict someone in a federal court. A Federal prosecutor either needs a political bone to pick or a pretty easy to convict case to push for charges. Federal prosecutors have limited time and pick things that either grant them political expediency or they believe that they have enough evidence that the person they are going after is going to end up convicted with some certainty. The problem here is not that Theranos has failed or has misrepresented the product, it's that Holmes personally needs to have been found to directly misrepresent the company in a fraudulent fashion. Her and Theranos can likely be sued (as civil cases require "preponderance of evidence") but I highly doubt you can prove fraud beyond a reasonable doubt unless there is a much greater scandal that is unearthed during an investigation. And that's probably not going to happen. So let's talk about a federal investigation of Theranos, then: this is someone who has had James Mattis, the current prime candidate for Secretary of Defense, for help and sits on the board of Theranos [1]. She is connected to most of the political elite (Kissinger et al, all of the VC/finance world.) If anyone can put down an FBI investigation on her person, it would be someone this well connected to organizations that the FBI themselves lean upon in some way or another. This is Washington, and let's be real, favors are favors. Helping one of these guys somewhere in some way buys you favors, and you may be able to trade to get the investigation off of your back. Furthermore, what stands to be gained by all of those on this board in power by prosecuting Holmes? It would tarnish the reputation of potential cabinet members and all others in Washington that "believed in" Holmes and her ideas. The political PR nightmare for these guys isn't worth the trouble of being involved in this. It becomes scandal for them. They would best see the company fade into irrelevance, and begin setting up the message that this is just another failed entrepreneurial case, of people making a moonshot and missing it. Tell Holmes it's OK, give her a powerful position in some healthcare think tank, and be on your way. Also, what message does it stand to give the American public that have been sold on this visionary? The PR storm told people here is a white, female college dropout who hit the Forbes list and achieved the American dream. Do you really want to start a news cycle where Holmes is now being thrown in prison? Do you want that message, especially when so much of Washington is connected to it? That's emotionally heartbreaking to many. So there's no bone to pick, if anything negative political blowback, an uncertain ability to prove Holmes herself defrauded people, and enough political power to tell the FBI to look at someone else. This is why I say there's little to no hope of her going to prison for this. Holmes knows what she is doing on that front, even if her visions didn't fully materialize. She has played the PR game pretty well up until this point, shoved her chips all in on the moonshot, and failed to deliver the goods. Frankly, I think she has thought all this through and her bets are on what I've said above. The question is whether or not this line of thinking is incorrect. I am armchairing it, and her life is on the line. [1] http://www.fiercebiotech.com/medical-devices/theranos-asked-military-general-for-help-tamping-down-misinformation-from-dod http://www.fiercebiotech.com/medical-devices/theranos-asked-...
goodJobWalrus 10y ago
> Boies Schiller was granted more than 300,000 shares valued at $4.5 million, based on a valuation of $15 a share at the time, this person said. yeah, they are not getting paid.
andrewfong 10y ago
From the article: > The law firm was paid in Theranos stock for its work on the patent case, according to a person familiar with the matter. Boies Schiller was granted more than 300,000 shares valued at $4.5 million, based on a valuation of $15 a share at the time, this person said. Wonder what the valuation's at now.
diogenescynic 10y ago
She'll never do a day. She knows all the right people to pull the right levers. The privilege of wealth.

sidi 10y ago

Google link to read the full article: https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0ahUKEwi4k6e_3MLQAhUr04MKHSAtA7MQFgggMAA&url=http%3A%2F%2Fwww.wsj.com%2Farticles%2Ftheranos-and-david-boies-cut-legal-ties-1479514351&usg=AFQjCNEMvPo1d3t1sfzJcPyAoC2Yk0FSDw&sig2=C0IfzcuiU8Zjd1yy-st7Lw https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&c...

RickS 10y ago
tip: the "web" link underneath the title does this automatically
- fuzzfactor 10y ago
  observation: the "web" link underneath the title appears intended to do this automatically performance report: the "web" links usually fail (as in this case) completely when needed most no matter how much time you waste trying, but sidi's link works ideally instantly. Using a Tor browser.
  - curiousgal 10y ago
    I t didn't work on CHrome as well but opening it in an incognito window made it work for me.

debt 10y ago

it's unfortunate theranos didn't pan out. seems like a technology capable of what was claimed would be incredibly beneficial for diabetics.

foobarian 10y ago
Don't diabetics already have testing tech that works off tiny pinpricks? IIRC the holy grail for diabetics is testing without drawing blood.
- trprog 10y ago
  >Don't diabetics already have testing tech that works off tiny pinpricks? Yep. Labs can do more comprehensive tests that some diabetics get done periodically but home testing kits work via a finger prick.
- SilasX 10y ago
  Correct. Diabetics are only checking for a very narrow metric (glucose levels IIUIC), which is not very sensitive to interference from surface skin cells. That doesn't hold for most of the other things that Theranos was trying to make a test for.
wavefunction 10y ago
Certainly many as-yet fanciful technologies would be incredibly useful for us all.

bby 10y ago

fuck elizabeth

bitwize 10y ago

If David Boies -- Mr. SCO v. IBM -- cuts ties with you, that's a serious mic drop against your credibility as a company.

pseingatl 10y ago

Classic conflict of interest: Boies was not only the company's counsel, he was a director and his firm was a shareholder, his partner was Theranos' general counsel. The interests of the firm were to keep Theranos operating as a going concern, keep the contract with Walgreens, stop the federal investigation (Madoff and the SEC anyone?) and keep the money flowing. His partners' ambushing a suspected whistleblower was thuggery. Theranos was a Madoff-type operation because everyone thought that a former head of NASDAQ with a blackbox split/strike conversion strategy couldn't possibly be a fraudster. Theranos had a contract with Walgreens, was approved by Medicare, was a billion dollar company--how could it possibly be a snake oil vendor? But he was and they were. Boies tried to keep the game running as long as he could and who knows, maybe he drank the Theranos Kool-Aid as well, but now it is obvious that there's no there there and Theranos is doomed.