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Cepth’s comment looks more in-depth. But I dug out the following quote, I think this was the first kind of consumer facing testing: “AFTER ALL THE DELAYS, the

by xevb3k 8y ago

Cepth’s comment looks more in-depth. But I dug out the following quote, I think this was the first kind of consumer facing testing: “AFTER ALL THE DELAYS, the partnership seemed to finally be getting off the ground in the early months of 2012: as a beta run before a full launch, the companies had agreed that Theranos would take over the blood testing at an employee health clinic Safeway had opened on its corporate campus in Pleasanton. The clinic was part of Burd’s strategy to curb the supermarket operator’s health-care costs by encouraging its workers to take better care of themselves.” Carreyrou's first article was October 2015. I think the Walgreens stuff had kicked off by then too. The FDA probably took a while to deal with it. But by putting a non-working instrument in a consumer facing context they were clearly going to get involved at some point. If they hadn’t done that, I don’t think it would have been a news story, or that legal action would have been taken. This stuff happens relatively often, investors just right-off the investment (or otherwise try and dump it).

cepth 8y ago
From the Carreyrou piece on Tyler Schultz (https://www.wsj.com/articles/theranos-whistleblower-shook-the-companyand-his-family-1479335963 https://www.wsj.com/articles/theranos-whistleblower-shook-th...), it seems like Schultz was already complaining to Holmes about the ridiculous validation data they were submitting in April 2014, specifically sending in data from tests not performed on the machines used for consumer testing, and instead performing the proficiency testing on Siemens machines. I think this alone would probably be illegal? This is not to mention all the other shady stuff that Theranos did in pitching investors. E.g., falsely claiming that they had machines being used in the field with the US Army, and that Johns Hopkins had validated results from their finger prick blood tests. This would also seem to be outright securities fraud? Carreyrou may have exposed Theranos, but the sheer amount of illegality at the company seemed to have been going on for years.
- xevb3k 8y ago
  I mean lying to investors is certainly illegal. But usually the investors can’t do anything about it, or perhaps more accurately don’t want to after the fact. It’s not like suing the company gives them a desirable outcome. In fact it probably makes them look slightly more risky to companies looking for investment. Usually they just write off the investment and move on. Just like Rupert Murdoch did (sold it back to Theranos for 1USD). Either that or they look for someone else to pump more money in or cash them out. I feel like that was the subtext of a lot of the conversations with board members/investors in the book. There was nothing they could do, except make the play look as good as possible and hope more money gets poured in and it either works eventually, or they get to cash out... so.. why acknowledge any of the issues?

by xevb3k 8y ago

cepth 8y ago

From the Carreyrou piece on Tyler Schultz (https://www.wsj.com/articles/theranos-whistleblower-shook-the-companyand-his-family-1479335963 https://www.wsj.com/articles/theranos-whistleblower-shook-th...), it seems like Schultz was already complaining to Holmes about the ridiculous validation data they were submitting in April 2014, specifically sending in data from tests not performed on the machines used for consumer testing, and instead performing the proficiency testing on Siemens machines. I think this alone would probably be illegal? This is not to mention all the other shady stuff that Theranos did in pitching investors. E.g., falsely claiming that they had machines being used in the field with the US Army, and that Johns Hopkins had validated results from their finger prick blood tests. This would also seem to be outright securities fraud? Carreyrou may have exposed Theranos, but the sheer amount of illegality at the company seemed to have been going on for years.

xevb3k 8y ago
I mean lying to investors is certainly illegal. But usually the investors can’t do anything about it, or perhaps more accurately don’t want to after the fact. It’s not like suing the company gives them a desirable outcome. In fact it probably makes them look slightly more risky to companies looking for investment. Usually they just write off the investment and move on. Just like Rupert Murdoch did (sold it back to Theranos for 1USD). Either that or they look for someone else to pump more money in or cash them out. I feel like that was the subtext of a lot of the conversations with board members/investors in the book. There was nothing they could do, except make the play look as good as possible and hope more money gets poured in and it either works eventually, or they get to cash out... so.. why acknowledge any of the issues?