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Theranos Lays Off Most of Its Remaining Workforce
- alecco 9y agoI still can't believe how Elizabeth Holmes got away with just a slap in the wrist. Is it because the board was full of connected people? Or because it's a successful woman CEO story? Either way, it's a disgrace. Sociopaths will pick this signal as a boost of confidence.
- blhack 9y agoDoes anybody have a guess as to how many people died as a result of this scam? (And is it an episode of black mirror that I'm even on this train of thought?)
- samstave 9y agoPlease ELI5 what the scam was? I know they did Bad Things TM, but I don't know what exactly took place.
- scarmig 9y agoThey sold medical diagnostics that did nothing. They did this knowing that they did nothing. In a way, it's worse than the ads on the internet promising to cure cancer with nettles and probiotics and yoga. Online ad scammers can plead ignorance that what they sell isn't actually useful, and I'm sure there're legal disclaimers in fine print saying the products are sold purely for entertainment. Theranos, on the other hand...
- astura 9y agoThey sold a new type of blood test. Turns out the company was making false claims about their blood tests so the entire company ended up being one big sham.
- rdtsc 9y agoIt's a blood testing company that has been shady about its methodology and results. Does is really take an ELI5 to see how it could end being harmful to people.
- Obi_Juan_Kenobi 9y agoIIRC, the securities fraud is based on them claiming to perform tests that were actually performed on standard blood test equipment made by Seimens, as well as claiming to perform more diagnostics than they actually could. The whistleblowing is based on the data 'grooming' that their machines did, which made it look like the machines were more accurate than they actually were. Tyler Shultz brought up his concerns and was rebuked, and then went to the WSJ. The basic idea is that their machines didn't actually work.
- ABeeSea 9y agoThe DoJ can still bring charges. Settling with the SEC doesn’t shield her from legal action.
- fragsworth 9y agoNo question this Theranos situation would have inspired a whole new wave of startup con artistry, but I think all those people are currently peddling shitcoins. When the shitcoin bubble completely falls apart (a process which it may be going through right now), we might see a bunch of Theranoses popping up.
- dkersten 9y ago> a process which it may be going through right now Eh, I dunno. I'm not a big cryptocurrency fan, but that doesn't really sound like the current reality. It may have lost a lot of its December peak value, but the value of cryptocurrencies is still about where it was in November and has been stable there for a month or two. That's still a lot higher than the first ten months of 2017 (and previous years), so "completely falls apart" seems a bit strong.
- fragsworth 9y agoYou've mistaken what I mean when I say "shitcoin bubble". I'm talking about the thousands of ICOs that are utter garbage. At some point that has to fall apart. Eventually you burn enough people and there's nobody left to scam, or governments step in to regulate it. There's a reason you don't see stock peddling scams anymore.
- dkersten 9y agoAh, ok, fair enough. It seems that I did misunderstand. Thanks for clarifying.
- Obi_Juan_Kenobi 9y agoThere's a big difference between the 'regular' crypto market (btc ltc eth) and the shitcoin/ICO market. Watching 'dominance' of the various coins is an informative indicator (IMO) of the overall health of the system. https://coinmarketcap.com/charts/ https://coinmarketcap.com/charts/ (3rd chart down) Obviously market cap is an extremely fraught metric for coins (trade one token for $1.00, with a supply of trillions, and it's 'worth' trillions), but it should average out somewhat. Bitcoin is recovering a bit of dominance (which I think is a good sign), but that growing 'other' portion suggests that there's a lot of garbage, and that's only growing. So I agree with you; the crypto space is taking on more dubious value, more shitcoins, etc.
- cortesoft 9y agoIt is because the punishment for this sort of thing is ALWAYS a slap on the wrist.
- tenpies 9y agoDisagree, see: Martin Shkreli.
- pm90 9y agoHe was an outlier by a huge huge margin. Specifically, what got him in trouble is probably his public persona as much as his actual crimes. Plus... he was stupid enough to violate the terms of his probation and got thrown into jail. I don't think most executives are anywhere as stupid.
- lulmerchant 9y agoYou might argue that what kept Elizabeth Holmes out of trouble was her public persona as well. Neither case has the aroma of justice as far as I'm concerned.
- ClassyJacket 9y agoDidn't he go to jail for trying to get someone to cut Hilary Clinton's hair?
- mjcl 9y agoHis bail was revoked for offering $5000 for her hair with the follicle attached, but he had already been found guilty and was awaiting sentencing. It was a last straw, not a sole offense.
- icedchai 9y agoShkreli was obnoxious and disrespectful. If he was polite and considerate, he would've gotten the slap on the wrist, guaranteed.
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- txsh 9y agoAnything less than life in prison is a miscarriage of justice. She’s a murderer.
- rm999 9y ago>Is it because the board was full of connected people? The board was scammed by her and lost billions of potential dollars, so that's probably not why. If anything, I wonder the opposite, why the connected people didn't do more; I'm guessing it's because destroying her further isn't worth their time?
- neaden 9y agoPeople are frequently very averse to admitting they've been scammed, especially people with a reputation to protect.
- avs733 9y ago>The board was scammed by her and lost billions of potential dollars I think it is fair to summarize the literal job, and legal responsibility, of the board as don't get scammed They aren't ma and pa kettle...
- adwf 9y agoTrue, but nonetheless, fraud is fraud. Even rich board members get scammed sometimes. Fraud laws protect people from scams after the fact.
- rpmcmurphy 9y agoBut she wears a black turtleneck, just like Steve Jobs.
- aphextron 9y agoIt absolutely blows my mind how she avoided jail time over this. If I had called someone on the phone and scammed their credit card for $1,000, I'd be looking at 3-5 years in Federal prison. There truly are zero consequences in life beyond a certain level of net worth.
- nur0n 9y agoNot sure I follow; I'm pretty sure her net worth is obliterated by now
- BayesStreet 9y agoShe never earned that worth in the first place, it was effectively a zero risk bet for her with non-zero damages to others. This sort of thing should not be allowed to happen.
- exolymph 9y agoShe risked her reputation, which is now destroyed (deservedly).
- red_phone 9y agoShe settled the SEC’s civil case against her but the article indicates she remains under a separate criminal investigation.
- jbob2000 9y agoYou'd have to be pretty stubborn to remain at this company after all of the bad news it's been getting lately. The writing was on the wall like a year ago that this ship was sinking, why would anyone stay?
- vkou 9y agoBecause they need a paycheck. Searching for a new job is incredibly stressful and emotionally draining, and is not the best option for everyone, at any particular time.
- sbarre 9y agoIndeed.. I suspect the average HNer is much more employable than the average corporate/office worker, and it's something we all probably lose sight of from time to time (particularly when I see comments like "just get a different job!")
- rmk 9y agoNot to mention the fact that healthcare is tied to your employer, so if you are the sole breadwinner for a large family, you pretty much have to have another job in hand before you can jump ship. The recession ended a while ago, but it was a relatively jobless recovery and non-tech sectors still haven't recovered fully.
- Bud 9y agoWait. They still had a workforce? What the heck are they working on? How are they still extant? The entire operation was revealed to be a world-historical fraud! How is this company still in operation on any level? I don't get it.
- uniformlyrandom 9y agoAFAIR, they have switched focus to some other bullshit idea called miniLab: > “We will return our undivided attention to our miniLab platform,” writes Holmes of the new device she unveiled in early August at the American Association for Clinical Chemistry’s convention in Philadelphia. She added that “our ultimate goal is to commercialize miniaturized, automated laboratories capable of small-volume sample testing, with an emphasis on vulnerable patient populations, including oncology, pediatrics, and intensive care.” http://fortune.com/2016/10/05/theranos-shuts-down-clinics/ http://fortune.com/2016/10/05/theranos-shuts-down-clinics/
- blhack 9y agoWhat's the opposite of "nobody every got fired for choosing IBM"? This woman needs to steer far, far away from anything in the medical field for a LONG time. If she does end up back in that field, she needs to be way behind the scenes. Not presenting at a conference.
- jcadam 9y agoI can't imagine anyone entrusting this person with anything ever again, particularly a position of leadership. Though, the cynic in me is sure she'll be showered with funding the next time she deigns to start a new venture.
- rrdharan 9y agoPretty sure she can easily get a book deal and find a second career as a motivational speaker: https://en.wikipedia.org/wiki/Jordan_Belfort https://en.wikipedia.org/wiki/Jordan_Belfort
- tnolet 9y agoTheranos is by far the most explicit example of "fake it till you make it" I've seen. Maybe that motto should be shelved in the future.
- api 9y agoI have never seen "fake it till you make it" or it's close relative "stone soup" actually work long term.
- jjeaff 9y agoI think the real "fake it till you make it" does work and is very common. But you have to "fake" things that are reasonable. So when a customer or employer asks if you can do something, you say yes. It's one thing if you have never done it before. You can surely learn. It's another if you are saying you can do something that no one has ever done before.
- peaseagee 9y ago"Fake it till you make it" seems to work OK for personal development. Not at all as a business plan!
- untog 9y agoThat would be good. At a bare minimum, let's shelve it from healthcare related endeavors.
- 9y ago
- GameOfTrolls 9y agoHow is that broad not in jail but the pharma-bro is doing hard time?
- the_cat_kittles 9y agoi take enormous pleasure in this, its great to see a fraud go down, simple as that
- khhh35575544 9y agoArguably a step forward for feminism also
- wintorez 9y agoThis article aged so well: http://time.com/3822734/elizabeth-holmes-2015-time-100/ http://time.com/3822734/elizabeth-holmes-2015-time-100/
- adamsea 9y agoAhh, hahahaha. And it’s by Henry Kissinger.
- lotsofpulp 9y agoHe whored himself out for so little.
- wintorez 9y agoI remembered reading about her back then and I was thinking her story sounded a little too good to be true.
- lainga 9y agoSo little? He and Mattis were the pimps in this case.
- lotsofpulp 9y agoI guess I don't know what his payout was, but he attached his name to something embarrassing which couldn't have possibly made him that much extra cash.
- stevenwoo 9y agoThat seems like such a tiny misdemeanor compared to something like deliberately prolonging the Vietnam War to win a Presidential election.
- blackbagboys 9y agoWell, he also killed millions of people, so a little whoring probably didn't weigh too heavily on his conscience.
- grizzles 9y agoThey just raised $100M from Fortress Capital backed by their patent portfolio. If I had to guess this money is probably coming from a subset of their existing stuck investors banding together in a magical thinking exercise to win back. A good lesson in human frailties. It's hard to watch something you had that you thought was worth billions go to zero. They might as well have funded a whole new company.
- bllguo 9y agounbelievable. After seeing this, can anyone doubt that luck is a major factor in success? These investors won't even take the time to do the most basic due diligence. They have no business managing millions of dollars.
- grizzles 9y agoVenture capital tends to be a badly performing asset class. Here a VC's motivation is easy to discern, it's a way to kick the can down the road. You take a liability (your shitty investment) and Fortress magically transforms it into something that looks vaguely asset-like (a portfolio of shitty investments). The only question is if the top up you pay will be worth it to the LPs. To the VC it is, because it saves embarrassment. Due to this moral hazard, there is a maybe an argument to be made here that distressed asset industry kind of breaks capitalism.
- bllguo 9y agoI appreciate the insight. There is more nuance here than my comment would suggest. What I said probably applies more to the initial investors, before Theranos was fully exposed as fraudulent.
- sseveran 9y agoThat could be true, but I suspect not. Fortress does have a reasonable sized distressed business which include both debt and credit. Also the loan Fortress gave them was contingent on certain milestones being met, so its not like they just wired the $100M. It's a good bet that the milestones are not being met. It's also unlikely that Fortress's distressed business is likely to fund a growing startup. They are specifically looking for assets that look bad but they can find value in.
- pg_bot 9y agoI actually found it incredible that they had 125 people still working for them. Why would anyone continue to spend their time working for such a disreputable company?
- ThrustVectoring 9y agoRent is due and you have no better options.
- walshemj 9y agowell if they are still paying you it helps keep the rent paid whist you look for a new job
- Simulacra 9y agoWhere does Elizabeth Holmes go from here? Does she have a future somewhere else, or is this something that will be hard to come back from? I don't see her as someone who would willingly work for others. Thoughts?
- twic 9y agoShe could go back and finish her degree.
- MrMember 9y agoWrite a book, maybe? You'd have to be insane to hire her or invest in anything she does in the future.
- Nelson69 9y agoIt's really up to if the investors felt she defrauded them all. Some clearly do but others? It's not so clear to me. For whatever the reasons, she seems to be loved by at least a few investors, enough so that it puts dorks here on HN off. Unicorn funding makes it a little different but I've worked with multiple CEOs that lost investors millions of dollars, had companies fail and then had the same investors bank roll them again. So long as the investors feel like they're running things the right way and communicating with them the right way, they appear to think a 40% hit ratio is stellar. Greed has a very limited memory. She'll take a break, probably get some sort of sweetheart deal either as a CEO or C-level officer of some small existing company in a different space (ad analytics or something, who knows?) and if they knock that out of the park, she'll be a champion again ready to get funding for whatever hot idea turns up. I also wouldn't be surprised to see her working at a VC firm. If the DOJ swoops in and has charged, that would make things different.
- k1lly 9y agoAgain, what did you expect? https://medium.com/multiple-personalities-order/how-to-be-the-best-investor-in-the-world-ed31163fe965 https://medium.com/multiple-personalities-order/how-to-be-th...
- dandare 9y agoNow take a minute to think about the actual employees. Most of them did nothing wrong. Many relocated of left their previous jobs, their carriers are disturbed, their CVs tainted.
- kapauldo 9y agoI kind of feel bad for her. Adults told a teenager she was a genius so she believed she was a genius.
- Balgair 9y agoOften, we look at the negative in what Ms. Holmes wrought (rightfully so). Instead, for a sec, look at one positive point in what Tyler Shultz brought forth through his heroic actions against Theranos[0]. His story showed us what SV is and what it can be. Though never guaranteed, he has a happy ending as he recently launched Flux Biosciences in 2017[1]. Remember: Be like Tyler Shultz. [0]https://www.vanityfair.com/news/2016/11/explosive-new-details-emerge-in-lawsuit-against-theranos https://www.vanityfair.com/news/2016/11/explosive-new-detail... [1]https://www.forbes.com/sites/elliekincaid/2017/10/03/after-blowing-the-whistle-on-theranos-tyler-shultz-is-going-back-into-diagnostic-testing/2/#399c8cc4fd5f https://www.forbes.com/sites/elliekincaid/2017/10/03/after-b...
- cft 9y agoI would love to be like Tyler Shultz but my grandfather is not George Shultz...
- Balgair 9y agoI hear this a lot about Tyler. It just shows that the commentor never read the linked articles or did any research. Tyler and his Grandfather are not on speaking terms due to the whistle blowing and likely never will be. Tyler very much forgave any inheritance and was likely to be bankrupted due to his heroic actions, yet he did them anyways because it was the right thing to do. Maybe his grandfather's position got him into the job in the first place, but Tyler very much was facing a life of endless poverty for his whistle blowing.
- epmaybe 9y ago"Endless poverty" Wealth is relative, sure, but this seems a rather strong choice of words for what becomes of whistleblowers.
- neurotech1 9y agoNon-Paywall: http://archive.is/xtXYU http://archive.is/xtXYU