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Elizabeth Holmes urged employees to hide Theranos’ lab equipment from inspectors

284 points by samizdis 5y ago

encryptluks2 5y ago
If anyone truly deserves a very long prison sentence it is Elizabeth Holmes. I think we're about to confirm what we've always known and that has been apparent since the start of this case. That rich white people, even if they got their money by taking advantage of others are pretty immune from harsh punishment in the criminal justice system.
- akshayB 5y ago
  I can't recall last time a C-level company executive get into trouble for using deceptive tactics, every S&P500 company does this to some extent. When they get caught, in majority of cases it is a gentle slap on the wrist or given more of a timeout and reallocation of their position. Also unfortunately using public money and delivering a bad product is not a criminal offense, more like being sloppy at what you do. With big lawyers involved she might get sometime in a fancy hotel like prison or some restrictions on trading stock or fundraising.
  - misiti3780 5y ago
    https://en.wikipedia.org/wiki/Enron_scandal https://en.wikipedia.org/wiki/Enron_scandal
    - hef19898 5y ago
      Maybe it's time for a new SOX moment.
    - akshayB 5y ago
      The point I am trying to make is way things work in US, most likely C-levels and high level officials of companies get away with it. I am sure there are cases when folks got into trouble. Apple had Antennagate for one of the iphones and even with a class-action lawsuit people got like $15 reimbursement. For these huge companies in most of the time amount of fines are more like margin of error in accounting spreadsheet.
      - billyhoffman 5y ago
        These are not remotely comparable. One is a company that built a product with a design flaw effecting only one aspect of the product (cell radio) that was only triggered under certain circumstances (placing you fingers in certain positions). A civil lawsuit against the company caused the company to issue a fix (free bumper case which insulated the antenna) that retroactively fixed all products that shipped with the flaw. The other is a medical device company that sold a product that didn’t work, giving incorrect results that directly informed how people treated or even detected health problems. People inside the company knew this and lied anyway, repeatedly, and then those people induced and conspired with others to hide their fraud. Those specific people are now facing criminal charges.
      - floatboth 5y ago
        Antennagate and a big fraudulent startup in the medical (!) industry are quite different scale things.
    - makerofspoons 5y ago
      Interestingly Holmes' father was a VP at Enron: https://www.forbes.com/sites/petercohan/2019/02/17/4-startling-insights-into-elizabeth-holmes-from-psychiatrist-whos-known-here-since-childhood/?sh=5aa44ae2366b https://www.forbes.com/sites/petercohan/2019/02/17/4-startli...
  - superbaconman 5y ago
    > According to the indictment, the defendants also allegedly made numerous misrepresentations to potential investors about Theranos’s financial condition and its future prospects. For example, the defendants represented to investors that Theranos conducted its patients’ tests using Theranos-manufactured analyzers; when, in truth, Holmes and Balwani knew that Theranos purchased and used for patient testing third party, commercially-available analyzers. The defendants also represented to investors that Theranos would generate over $100 million in revenues and break even in 2014 and that Theranos expected to generate approximately $1 billion in revenues in 2015; when, in truth, the defendants knew Theranos would generate only negligible or modest revues in 2014 and 2015. https://www.justice.gov/usao-ndca/us-v-elizabeth-holmes-et-al https://www.justice.gov/usao-ndca/us-v-elizabeth-holmes-et-a... If that's not fraud, what is?
  - wyldfire 5y ago
    > Also unfortunately using public money and delivering a bad product is not a criminal offense, more like being sloppy at what you do. They lied to FDA auditors in what sounds like a criminal conspiracy to defraud investors, business partners, and the patients whose blood tests were processed there.
  - mordechai9000 5y ago
    Here's a fun one: a telecom CEO (named Elizabeth, too) was forging customer signatures - signatures of people she had known and worked with in many cases - to show to investors. And she took money from friends and employees, and told them they were getting shares in the company. In reality she used the money to pay off her lifestyle expenses. To be fair, she probably intended to make good on the investments once the company was wildly successful. The amazing thing is, the company had hired a new CEO and is actually still operating. Last I heard. https://www.bloomberg.com/news/features/2019-10-08/quintillion-ceo-s-promise-to-wire-the-arctic-was-1-billion-scam https://www.bloomberg.com/news/features/2019-10-08/quintilli...
  - smart_creature 5y ago
    She didn't just "using public money and delivering a bad product". She lied to investors and regulators. That is called fraud and it is definitely a criminal offense. Her defense rests on proving she did not do it knowingly or with the intention to defraud. Nevertheless, yes she could get away with it. And yes, this being the United States race and class is involved but more so class in this case.
- hart_russell 5y ago
  I think you could have just stopped at rich. Money helps anyone going through the US Justice system, regardless of color.
  - tmpz22 5y ago
    The data backs it up [1]. Sentencing disparities based on race in the United States are undeniable. [1]: https://www.aclu.org/sites/default/files/assets/141027_iachr_racial_disparities_aclu_submission_0.pdf https://www.aclu.org/sites/default/files/assets/141027_iachr...
    - svrourke 5y ago
      There's always someone that has to make sure no one is being unfair to white people
    - hart_russell 5y ago
      So based on your provided data, white people are incarcerated more than latino and “other”.
  - shadilay 5y ago
    R Kelly did some horrific things and it took 20 years to stop him. Money helps regardless of color. https://www.bbc.com/news/entertainment-arts-40635526 https://www.bbc.com/news/entertainment-arts-40635526
- thehappypm 5y ago
  I kinda disagree. Sure, she was not honest to investors. But who cares? these investors are billionaires trying to make a quick buck. The faulty equipment in actual pharmacies is problematic, but I can actually see how prototypes out in the wild is a good thing.
  - jjulius 5y ago
    >Sure, she was not honest to investors. ... or the businesses that purchased the machines, and every average person who got tested with those machines and put their faith in the results, all because she was dishonest. This is the healthcare industry we're speaking of - it's not just investors at stake here, it's everyone's health that she put at stake for the sake of getting herself rich. Edit: Regarding prototypes in the wild; given that this is healthcare, I don't mind prototypes being used as long as the unknown accuracy of the devices is clearly communicated before they are used, and everyone getting a test understands that they're part of a clinical trial. This was absolutely not the case.
    - thehappypm 5y ago
      I agree that the prototypes in the wild was done improperly. If it's a prototype used for data gathering with a big "these are prototypes!" waiver, then that's one thing. I'm not sure how they were positioned in the stores they were placed in, if they were marketed as a 100% accuracy miracle box or an up-and-coming technology that still has to have kinks worked out. In either case I'm struggling that this is jail time criminal; I think at best it's a civil issue.
      - jjulius 5y ago
        We'll have to agree to disagree here. To me, with the level of fraud she engaged in in every area of her company, and the fact that that fraud impacted the healthcare decisions of individuals who used that test, that is a criminal issue. She was fucking around with the actual health of people for her own financial gain.
  - chollida1 5y ago
- danso 5y ago
  Why do you think it's apparent that this case in particular will reaffirm that rich white people "are pretty immune from harsh punishment in the criminal justice system"? I mean I don't argue that the wealthy often escape justice, but why would you think the Theranos case is evidence of that? It's literally at trial right now, which is a very, very bad scenario for Holmes. The vast majority of cases (including ones with a guilty plea) don't go to trial.
- s_dev 5y ago
  >That rich white people Balwani isn't white. He seems just as culpable as Elizabeth.
- stickfigure 5y ago
  Hold your outrage, the show's not over yet.
RegnisGnaw 5y ago
The problem is that none of this will work against her defense, that she was not of sane state of mind at the time.
- xqcgrek2 5y ago
  Western society is way too tolerant of certain kinds of mental illness, such as sociopathy/psychopathy, and intolerant of others (e.g. anxiety/depression).
  - toss1 5y ago
    Very succinct statement of the issue. Not only is Western society too tolerant of sociopathy, corporate structures tend to actively filter to top ranks those with such behaviors (just spend 5min reading Glassdoor or any employment-related NH topic...).
    - short_sells_poo 5y ago
      I have a pet theory on this that is entirely based on my own biased views: societies which are communal, whether around a family, village, tribe, etc..., tend to keep sociopathic tendencies in check. Either the sociopathic individual is exiled from the group, or at least identified and prevented from harming the collective. If the larger structure is still made up of smaller (at most 100s of individuals) communities, exiles risk becoming pariahs and without any societal support, it becomes next to impossible to strive (or even survive). In highly individualistic societies, a lot of the most personal checks and balances are removed. You no longer have a tight-knit family that imposes some moral framework and behavior on it's members (good or bad). Having said that, I'm not sure whether there are any truly communal societies left in the modern world. I suppose some isolated, rural communities could qualify, but pretty much all modern countries are now individualistic. Family values are slightly more pronounced in the East/far-East, but not to a degree that matters. Being successful still often trumps being a decent human being.
      - toss1 5y ago
apples_oranges 5y ago
The modern wisdom, "fake it till you make it", requires you to make it, otherwise you'll pay for lying to us.
- deleted 5y ago
  [deleted]
- SkipperCat 5y ago
  I'm curious, does this case get so much publicity because it touches upon all the tropes of Silicon Valley? 'Fake it till you make it', 'move fast and break things', 'disrupt the markets', etc. IMHO, this business model is fine when the only things at risk are venture capital and you're trying to sell more widgets, but when it comes to life and safety - bad news.
  - capableweb 5y ago
    > IMHO, this business model is fine when the only things at risk are venture capital [...] Isn't there always more risk than just "venture capital" to this "move fast and break things" model? Take Uber for an example, sure, they've burned so much cash trying to circumvent laws, but not only have they burned cash, they have also changed economies around the world by burning this cash and trying to disrupt things. Many normal taxi drivers are now without jobs, and suddenly the risk seems bigger than just venture capital. Same with AirBnb and changing the hospitality sector, and many other examples where it seems there is just cash being burned, but that burn also have an outside effect bigger than just the burn.
    - krageon 5y ago
      Yes, organised crime (because that is what you are describing) has big knock-on effects on the rest of society. That is why we treat organised crime the way we normally do. The fact that these corporations were allowed abroad and left to do what they did highlights that the legal system (meant in the first place to protect citizens) has been broken. That that doesn't get looked at harder and seen for what it is is truly tragic.
    - 5y ago
bryanrasmussen 5y ago
I am actually very, very surprised that they had lab equipment?
- throwoutway 5y ago
  There was a second room where they led the inspectors with true lab eqpt while the other had the inaccurate machines (according to the book)
  - the-dude 5y ago
    Are you sure it wasn't the other way around? Weren't they pretending to operate their own equipment while the real equipment was 'behind the curtain' ?
    - lmkg 5y ago
      Depends on what's being audited. For investors, you want to show a room of gear that other companies don't have. For certification of medical equipment, you want to demonstrate that your process works.
    - throwoutway 5y ago
      Maybe I forgot, but I think they were operating both.
    - moogly 5y ago
      Yeah, that's what I remember too. They had the Siemens equipment in a back room that they used to run the real tests on, but pretended that they were using their own tech for these tests.
- tito 5y ago
  BioCurious received some very nice lab equipment for free when Theranos shutdown: https://biocurious.org/ https://biocurious.org/
louwrentius 5y ago
If you haven't read the book "Bad Blood" by John Carreyrou I think you should give it a try. I think it's really worth it.
- philg_jr 5y ago
  And the new podcast that Carreyrou is doing for the most updated info on the evidence and trial, “Bad Blood: The Final Chapter”.
  - callistus 5y ago
    Thanks for this! Just finished listening to the audiobook and was itching for an update by Carreyrou. There's another podcast, The Drop Out: Elizabeth Holmes on Trial that is also covering the trial.
- danso 5y ago
  Seconded. Besides being absolutely stock full of incredible/hilarious inside details about Theranos's rise and fall, it's one of the best books I've ever read about the investigative journalism process. Carreyrou goes out of his way to credit the obscure blog author who tipped him off to Theranos.
  - FloayYerBoat 5y ago
    ...and he details how the Wall Street Journal was pressured by very powerful people / organizations and they fully stood by their journalists. Very surprising and encouraging.
curtis3389 5y ago
> “Passing,” Christian told him, “is not an option.” In a later email exchange between Christian and Elizabeth, she told her brother, “You handled this excellently.” > In a separate reply, Balwani was dismissive of Rosendorff’s complaints and later emailed Holmes, urging her to fire him rather than let him finish his last few days. “We need to respond to him now and cut him Monday.” The worst management.
photochemsyn 5y ago
The crazy thing about Theranos is that so many people with experience in microfluidics (developed mainly for DNA sequencing although there are other uses) knew that their claims were impossible, technologically speaking. Working with such small volumes to obtain quantitive estimates of blood chemistry is so implausible, as you are introducing uncontrollable variability - micro-evaporation, even tissue localization issues, I mean all the trained blood chemistry specialists knew this. I worked a little with DNA microfluidics, and it works because it's not quantitative. Now, what they could have done is just stuck to pos/neg tests, i.e. 'are you infected with this virus or not' which is a lot more plausible as you don't have to meet a quantitative goal, just a detection goal. Also, one-stop STD screening for HIV / herpes / etc. is possible too (I suggested this and someone responded, 'new company name: ClapTrap"). It's really kind of sad, as Theranos might have been able to pull that off (although new management would probably be required), and then they'd have been positioned to do all the COVID testing (which was a major problem in the initial US response). What just amazed me is how gullible all the investors were, and how they didn't do due diligence, hire outside experts, or anything. Weird.
- misiti3780 5y ago
  I too thought about the counterfactual in which that if their technology actually worked, COVID testing could have been have been done at scale in the US.
  - jbay808 5y ago
    Isn't COVID testing being done at scale in many countries right now? I'm in Canada and I can go to a free drive through test station without appointment and get about a 24-hour turnaround on results, and that's been the case for over a year.
    - misiti3780 5y ago
      yes, but it was not happening in March 2020 in the US for a variety of reasons.
  - 5y ago
AlbertCory 5y ago
A free way [1] to track the trial, at least some of it. I'm hoping to go to at least one day of it. I'm sure the actual court reporter trial transcripts will be public at some point (does anyone know?), but they're not in [1]. If you are drawing comparisons between her and the rest of Silicon Valley, you are missing one rather important fact: hard sciences are hard. We have it easy in computers. There are government agencies involved in testing what she did, and people's health is at stake. Just imagine that some bureaucrat was reading every line of code you wrote. [1] https://www.courtlistener.com/docket/7185174/united-states-v-holmes/?filed_after=&filed_before=&entry_gte=&entry_lte=&order_by=desc https://www.courtlistener.com/docket/7185174/united-states-v...
- AlbertCory 5y ago
  Thought you'd find this [1] interesting. Carreyrou is a journalist who is part of the story, in fact did heroic work breaking the story. At one time at a Theranos company meeting, they chanted "F** you, Carreyrou!" I'd love to hear him testify about how they pulled out all the stops to try and suppress his WSJ stories. [1] https://storage.courtlistener.com/recap/gov.uscourts.cand.327949/gov.uscourts.cand.327949.1056.0.pdf https://storage.courtlistener.com/recap/gov.uscourts.cand.32...
tushar-r 5y ago
I recommend the "Bad Blood: The Final Chapter" podcast by John Carreyrou. He's the journalist who broke the story and the podcast goes into some detail about the history and also talks about what is going on now.
- carabiner 5y ago
  I recommend the video of her dancing to "Can't Touch This": https://www.youtube.com/watch?v=GrT0jKOhnD4 https://www.youtube.com/watch?v=GrT0jKOhnD4 and the video of her using her real, non-deep, voice: https://youtu.be/PjnsYz-xdOI?t=55 https://youtu.be/PjnsYz-xdOI?t=55
  - ipsum2 5y ago
    I despise Holmes, but using a video of her dancing as an argument against her seems like an ad homeniem.
- fullshark 5y ago
  Or read his book! It's fabulous.
  - paxys 5y ago
    Do both! I loved the book and am following the podcast. There's a lot of new commentary about the trial and the material that came out during discovery (which wasn't available to the author when he wrote the book).
  - tushar-r 5y ago
    Yeah, I've somehow fallen out of the habit of reading books. Need to get back in :)
Animats 5y ago
All that is in the book "Bad Blood".
spaetzleesser 5y ago
I know there is “fake it till you make it” but usually these companies have some idea how to get success. But as far as I understand Theranos never had any technology or approach that promised to lead to their goals. They just tried various stuff that never worked and lied about it. It was more like me starting a company that wants to create a battery with ten times the capacity of current batteries but having no idea how to achieve this so I take in a lot of money and desperately try to figure something out while having no promising insight .
- rsynnott 5y ago
  It's a step worse. It's as if you then sold that battery to electric plane manufacturers, really just gave them a standard lithium ion battery, and planes started falling out of the sky. Theranos's broken tech was used on real people and had real consequences.
- _tom_ 5y ago
  There's a world of difference between saying "we will do great things" and claiming "we have done great things".
hijinks 5y ago
say what you want about her but if I knew nothing about this company and someone told me the CEO got charged with a crime and she got pregnant after charges were filed. I'd almost think she is guilty and trying to get a lesser sentence because of having a kid. As a sane person the last thing I want to do is bring a child into a world where a parent could be in jail for 20 years.
aj7 5y ago
The famous picture of her taking reporters into the machine shop is one example. “Touring the machine shop” is an old trick when you want to waste time and not show anyone anything. Technically naive people don’t realize that modern machines each have a computer attached to them, and there is little proprietary in most shops.
- fullshark 5y ago
  I think it also makes for compelling pictures, which was her primary goal at all times: marketing.
dev_tty01 5y ago
Beyond all the fraud, lying, and deceit, the real shame is the lost opportunity and the associated colossal mismanagement. Theranos was able to marshal about a billion dollars with an overarching goal of democratizing access to health data. They basically accomplished nothing. Generating such a concentration of resources for this goal was a notable accomplishment. The subsequent arrogant (and stupid) inability to discern "hard" from "impossible" and adjust their approach to maintain some chance of success to the overarching goal was a grotesque and massive failure.
gumby 5y ago
This one point is misleading: > while it doesn’t appear that [they] barred inspectors from those rooms, keeping the doors shut certainly made it less likely that they would ask to see what’s inside. Typically during inspections, company employees are supposed to “show inspectors what they asked for,” Rosendorff said. This one point is unremarkable (at least as stated). When I was in the pharma business I was advised to have a conference room for visitors that was right off the waiting room, so we could have meetings with outsiders (i.e. inspectors) without them having to enter the facility in general. The point wasn’t to cover anything up but just avoid questions. FWIW we didn’t bother with this —- we didn’t have an “outside” conference room. But that is apparently not that unusual. State and federal inspectors get to look at anything part of the business. The federal ones can arrive armed! (Though I never saw this, only heard about it) Everything else I’ve read coming from the trial has been alarming, though I’m not following closely.
mrkramer 5y ago
She defrauded investors out of so much money, she deserves at least 10 years in prison imo.
- danjac 5y ago
  Frankly don't care about the investors, they won't go hungry and they should have known better. Endangering the lives of ordinary people though - 10 years isn't enough.
  - mrkramer 5y ago
    But the money which was lost investing in Theranos could've been invested in other companies that would actually save the lives of ordinary people the ones that Theranos was suppose to save.
    - rsynnott 5y ago
      I mean realistically, given the timing, it would probably have been invested in Uber or that iPhone app that was just a "hey" button or something.
- spaetzleesser 5y ago
  There is a documentary on Frontline about cannabis. A guy had a medical marijuana license from one state. Cops in another state find a small amount of marijuana with him. He gets 5 years. Put that in proportion to a possible punishment Holmes may receive.
jdorfman 5y ago
Tyler Schultz and Erika Cheung risked it all. They saved lives by blowing the whistle knowing it could potentially ruin their careers, relationships, financial stability (lawyer fees).
jnewman23 5y ago
Wait, I thought this was a fake case stemming from structural misogyny!

284 points by samizdis 5y ago

If anyone truly deserves a very long prison sentence it is Elizabeth Holmes. I think we're about to confirm what we've always known and that has been apparent since the start of this case. That rich white people, even if they got their money by taking advantage of others are pretty immune from harsh punishment in the criminal justice system.

akshayB 5y ago
I can't recall last time a C-level company executive get into trouble for using deceptive tactics, every S&P500 company does this to some extent. When they get caught, in majority of cases it is a gentle slap on the wrist or given more of a timeout and reallocation of their position. Also unfortunately using public money and delivering a bad product is not a criminal offense, more like being sloppy at what you do. With big lawyers involved she might get sometime in a fancy hotel like prison or some restrictions on trading stock or fundraising.
- misiti3780 5y ago
  https://en.wikipedia.org/wiki/Enron_scandal https://en.wikipedia.org/wiki/Enron_scandal
  - hef19898 5y ago
    Maybe it's time for a new SOX moment.
  - akshayB 5y ago
    The point I am trying to make is way things work in US, most likely C-levels and high level officials of companies get away with it. I am sure there are cases when folks got into trouble. Apple had Antennagate for one of the iphones and even with a class-action lawsuit people got like $15 reimbursement. For these huge companies in most of the time amount of fines are more like margin of error in accounting spreadsheet.
    - billyhoffman 5y ago
      These are not remotely comparable. One is a company that built a product with a design flaw effecting only one aspect of the product (cell radio) that was only triggered under certain circumstances (placing you fingers in certain positions). A civil lawsuit against the company caused the company to issue a fix (free bumper case which insulated the antenna) that retroactively fixed all products that shipped with the flaw. The other is a medical device company that sold a product that didn’t work, giving incorrect results that directly informed how people treated or even detected health problems. People inside the company knew this and lied anyway, repeatedly, and then those people induced and conspired with others to hide their fraud. Those specific people are now facing criminal charges.
    - floatboth 5y ago
      Antennagate and a big fraudulent startup in the medical (!) industry are quite different scale things.
  - makerofspoons 5y ago
    Interestingly Holmes' father was a VP at Enron: https://www.forbes.com/sites/petercohan/2019/02/17/4-startling-insights-into-elizabeth-holmes-from-psychiatrist-whos-known-here-since-childhood/?sh=5aa44ae2366b https://www.forbes.com/sites/petercohan/2019/02/17/4-startli...
- superbaconman 5y ago
  > According to the indictment, the defendants also allegedly made numerous misrepresentations to potential investors about Theranos’s financial condition and its future prospects. For example, the defendants represented to investors that Theranos conducted its patients’ tests using Theranos-manufactured analyzers; when, in truth, Holmes and Balwani knew that Theranos purchased and used for patient testing third party, commercially-available analyzers. The defendants also represented to investors that Theranos would generate over $100 million in revenues and break even in 2014 and that Theranos expected to generate approximately $1 billion in revenues in 2015; when, in truth, the defendants knew Theranos would generate only negligible or modest revues in 2014 and 2015. https://www.justice.gov/usao-ndca/us-v-elizabeth-holmes-et-al https://www.justice.gov/usao-ndca/us-v-elizabeth-holmes-et-a... If that's not fraud, what is?
- wyldfire 5y ago
  > Also unfortunately using public money and delivering a bad product is not a criminal offense, more like being sloppy at what you do. They lied to FDA auditors in what sounds like a criminal conspiracy to defraud investors, business partners, and the patients whose blood tests were processed there.
- mordechai9000 5y ago
  Here's a fun one: a telecom CEO (named Elizabeth, too) was forging customer signatures - signatures of people she had known and worked with in many cases - to show to investors. And she took money from friends and employees, and told them they were getting shares in the company. In reality she used the money to pay off her lifestyle expenses. To be fair, she probably intended to make good on the investments once the company was wildly successful. The amazing thing is, the company had hired a new CEO and is actually still operating. Last I heard. https://www.bloomberg.com/news/features/2019-10-08/quintillion-ceo-s-promise-to-wire-the-arctic-was-1-billion-scam https://www.bloomberg.com/news/features/2019-10-08/quintilli...
- smart_creature 5y ago
  She didn't just "using public money and delivering a bad product". She lied to investors and regulators. That is called fraud and it is definitely a criminal offense. Her defense rests on proving she did not do it knowingly or with the intention to defraud. Nevertheless, yes she could get away with it. And yes, this being the United States race and class is involved but more so class in this case.
hart_russell 5y ago
I think you could have just stopped at rich. Money helps anyone going through the US Justice system, regardless of color.
- tmpz22 5y ago
  The data backs it up [1]. Sentencing disparities based on race in the United States are undeniable. [1]: https://www.aclu.org/sites/default/files/assets/141027_iachr_racial_disparities_aclu_submission_0.pdf https://www.aclu.org/sites/default/files/assets/141027_iachr...
  - svrourke 5y ago
    There's always someone that has to make sure no one is being unfair to white people
  - hart_russell 5y ago
    So based on your provided data, white people are incarcerated more than latino and “other”.
- shadilay 5y ago
  R Kelly did some horrific things and it took 20 years to stop him. Money helps regardless of color. https://www.bbc.com/news/entertainment-arts-40635526 https://www.bbc.com/news/entertainment-arts-40635526
thehappypm 5y ago
I kinda disagree. Sure, she was not honest to investors. But who cares? these investors are billionaires trying to make a quick buck. The faulty equipment in actual pharmacies is problematic, but I can actually see how prototypes out in the wild is a good thing.
- jjulius 5y ago
  >Sure, she was not honest to investors. ... or the businesses that purchased the machines, and every average person who got tested with those machines and put their faith in the results, all because she was dishonest. This is the healthcare industry we're speaking of - it's not just investors at stake here, it's everyone's health that she put at stake for the sake of getting herself rich. Edit: Regarding prototypes in the wild; given that this is healthcare, I don't mind prototypes being used as long as the unknown accuracy of the devices is clearly communicated before they are used, and everyone getting a test understands that they're part of a clinical trial. This was absolutely not the case.
  - thehappypm 5y ago
    I agree that the prototypes in the wild was done improperly. If it's a prototype used for data gathering with a big "these are prototypes!" waiver, then that's one thing. I'm not sure how they were positioned in the stores they were placed in, if they were marketed as a 100% accuracy miracle box or an up-and-coming technology that still has to have kinks worked out. In either case I'm struggling that this is jail time criminal; I think at best it's a civil issue.
    - jjulius 5y ago
      We'll have to agree to disagree here. To me, with the level of fraud she engaged in in every area of her company, and the fact that that fraud impacted the healthcare decisions of individuals who used that test, that is a criminal issue. She was fucking around with the actual health of people for her own financial gain.
- chollida1 5y ago
danso 5y ago
Why do you think it's apparent that this case in particular will reaffirm that rich white people "are pretty immune from harsh punishment in the criminal justice system"? I mean I don't argue that the wealthy often escape justice, but why would you think the Theranos case is evidence of that? It's literally at trial right now, which is a very, very bad scenario for Holmes. The vast majority of cases (including ones with a guilty plea) don't go to trial.
s_dev 5y ago
>That rich white people Balwani isn't white. He seems just as culpable as Elizabeth.
stickfigure 5y ago
Hold your outrage, the show's not over yet.

RegnisGnaw 5y ago

The problem is that none of this will work against her defense, that she was not of sane state of mind at the time.

xqcgrek2 5y ago
Western society is way too tolerant of certain kinds of mental illness, such as sociopathy/psychopathy, and intolerant of others (e.g. anxiety/depression).
- toss1 5y ago
  Very succinct statement of the issue. Not only is Western society too tolerant of sociopathy, corporate structures tend to actively filter to top ranks those with such behaviors (just spend 5min reading Glassdoor or any employment-related NH topic...).
  - short_sells_poo 5y ago
    I have a pet theory on this that is entirely based on my own biased views: societies which are communal, whether around a family, village, tribe, etc..., tend to keep sociopathic tendencies in check. Either the sociopathic individual is exiled from the group, or at least identified and prevented from harming the collective. If the larger structure is still made up of smaller (at most 100s of individuals) communities, exiles risk becoming pariahs and without any societal support, it becomes next to impossible to strive (or even survive). In highly individualistic societies, a lot of the most personal checks and balances are removed. You no longer have a tight-knit family that imposes some moral framework and behavior on it's members (good or bad). Having said that, I'm not sure whether there are any truly communal societies left in the modern world. I suppose some isolated, rural communities could qualify, but pretty much all modern countries are now individualistic. Family values are slightly more pronounced in the East/far-East, but not to a degree that matters. Being successful still often trumps being a decent human being.
    - toss1 5y ago

apples_oranges 5y ago

The modern wisdom, "fake it till you make it", requires you to make it, otherwise you'll pay for lying to us.

deleted 5y ago
[deleted]
SkipperCat 5y ago
I'm curious, does this case get so much publicity because it touches upon all the tropes of Silicon Valley? 'Fake it till you make it', 'move fast and break things', 'disrupt the markets', etc. IMHO, this business model is fine when the only things at risk are venture capital and you're trying to sell more widgets, but when it comes to life and safety - bad news.
- capableweb 5y ago
  > IMHO, this business model is fine when the only things at risk are venture capital [...] Isn't there always more risk than just "venture capital" to this "move fast and break things" model? Take Uber for an example, sure, they've burned so much cash trying to circumvent laws, but not only have they burned cash, they have also changed economies around the world by burning this cash and trying to disrupt things. Many normal taxi drivers are now without jobs, and suddenly the risk seems bigger than just venture capital. Same with AirBnb and changing the hospitality sector, and many other examples where it seems there is just cash being burned, but that burn also have an outside effect bigger than just the burn.
  - krageon 5y ago
    Yes, organised crime (because that is what you are describing) has big knock-on effects on the rest of society. That is why we treat organised crime the way we normally do. The fact that these corporations were allowed abroad and left to do what they did highlights that the legal system (meant in the first place to protect citizens) has been broken. That that doesn't get looked at harder and seen for what it is is truly tragic.
  - 5y ago

bryanrasmussen 5y ago

I am actually very, very surprised that they had lab equipment?

throwoutway 5y ago
There was a second room where they led the inspectors with true lab eqpt while the other had the inaccurate machines (according to the book)
- the-dude 5y ago
  Are you sure it wasn't the other way around? Weren't they pretending to operate their own equipment while the real equipment was 'behind the curtain' ?
  - lmkg 5y ago
    Depends on what's being audited. For investors, you want to show a room of gear that other companies don't have. For certification of medical equipment, you want to demonstrate that your process works.
  - throwoutway 5y ago
    Maybe I forgot, but I think they were operating both.
  - moogly 5y ago
    Yeah, that's what I remember too. They had the Siemens equipment in a back room that they used to run the real tests on, but pretended that they were using their own tech for these tests.
tito 5y ago
BioCurious received some very nice lab equipment for free when Theranos shutdown: https://biocurious.org/ https://biocurious.org/

louwrentius 5y ago

If you haven't read the book "Bad Blood" by John Carreyrou I think you should give it a try. I think it's really worth it.

philg_jr 5y ago
And the new podcast that Carreyrou is doing for the most updated info on the evidence and trial, “Bad Blood: The Final Chapter”.
- callistus 5y ago
  Thanks for this! Just finished listening to the audiobook and was itching for an update by Carreyrou. There's another podcast, The Drop Out: Elizabeth Holmes on Trial that is also covering the trial.
danso 5y ago
Seconded. Besides being absolutely stock full of incredible/hilarious inside details about Theranos's rise and fall, it's one of the best books I've ever read about the investigative journalism process. Carreyrou goes out of his way to credit the obscure blog author who tipped him off to Theranos.
- FloayYerBoat 5y ago
  ...and he details how the Wall Street Journal was pressured by very powerful people / organizations and they fully stood by their journalists. Very surprising and encouraging.

curtis3389 5y ago

> “Passing,” Christian told him, “is not an option.” In a later email exchange between Christian and Elizabeth, she told her brother, “You handled this excellently.” > In a separate reply, Balwani was dismissive of Rosendorff’s complaints and later emailed Holmes, urging her to fire him rather than let him finish his last few days. “We need to respond to him now and cut him Monday.” The worst management.

photochemsyn 5y ago

The crazy thing about Theranos is that so many people with experience in microfluidics (developed mainly for DNA sequencing although there are other uses) knew that their claims were impossible, technologically speaking. Working with such small volumes to obtain quantitive estimates of blood chemistry is so implausible, as you are introducing uncontrollable variability - micro-evaporation, even tissue localization issues, I mean all the trained blood chemistry specialists knew this. I worked a little with DNA microfluidics, and it works because it's not quantitative. Now, what they could have done is just stuck to pos/neg tests, i.e. 'are you infected with this virus or not' which is a lot more plausible as you don't have to meet a quantitative goal, just a detection goal. Also, one-stop STD screening for HIV / herpes / etc. is possible too (I suggested this and someone responded, 'new company name: ClapTrap"). It's really kind of sad, as Theranos might have been able to pull that off (although new management would probably be required), and then they'd have been positioned to do all the COVID testing (which was a major problem in the initial US response). What just amazed me is how gullible all the investors were, and how they didn't do due diligence, hire outside experts, or anything. Weird.

misiti3780 5y ago
I too thought about the counterfactual in which that if their technology actually worked, COVID testing could have been have been done at scale in the US.
- jbay808 5y ago
  Isn't COVID testing being done at scale in many countries right now? I'm in Canada and I can go to a free drive through test station without appointment and get about a 24-hour turnaround on results, and that's been the case for over a year.
  - misiti3780 5y ago
    yes, but it was not happening in March 2020 in the US for a variety of reasons.
- 5y ago

AlbertCory 5y ago

A free way [1] to track the trial, at least some of it. I'm hoping to go to at least one day of it. I'm sure the actual court reporter trial transcripts will be public at some point (does anyone know?), but they're not in [1]. If you are drawing comparisons between her and the rest of Silicon Valley, you are missing one rather important fact: hard sciences are hard. We have it easy in computers. There are government agencies involved in testing what she did, and people's health is at stake. Just imagine that some bureaucrat was reading every line of code you wrote. [1] https://www.courtlistener.com/docket/7185174/united-states-v-holmes/?filed_after=&filed_before=&entry_gte=&entry_lte=&order_by=desc https://www.courtlistener.com/docket/7185174/united-states-v...

AlbertCory 5y ago
Thought you'd find this [1] interesting. Carreyrou is a journalist who is part of the story, in fact did heroic work breaking the story. At one time at a Theranos company meeting, they chanted "F** you, Carreyrou!" I'd love to hear him testify about how they pulled out all the stops to try and suppress his WSJ stories. [1] https://storage.courtlistener.com/recap/gov.uscourts.cand.327949/gov.uscourts.cand.327949.1056.0.pdf https://storage.courtlistener.com/recap/gov.uscourts.cand.32...

tushar-r 5y ago

I recommend the "Bad Blood: The Final Chapter" podcast by John Carreyrou. He's the journalist who broke the story and the podcast goes into some detail about the history and also talks about what is going on now.

carabiner 5y ago
I recommend the video of her dancing to "Can't Touch This": https://www.youtube.com/watch?v=GrT0jKOhnD4 https://www.youtube.com/watch?v=GrT0jKOhnD4 and the video of her using her real, non-deep, voice: https://youtu.be/PjnsYz-xdOI?t=55 https://youtu.be/PjnsYz-xdOI?t=55
- ipsum2 5y ago
  I despise Holmes, but using a video of her dancing as an argument against her seems like an ad homeniem.
fullshark 5y ago
Or read his book! It's fabulous.
- paxys 5y ago
  Do both! I loved the book and am following the podcast. There's a lot of new commentary about the trial and the material that came out during discovery (which wasn't available to the author when he wrote the book).
- tushar-r 5y ago
  Yeah, I've somehow fallen out of the habit of reading books. Need to get back in :)

Animats 5y ago

All that is in the book "Bad Blood".

spaetzleesser 5y ago

I know there is “fake it till you make it” but usually these companies have some idea how to get success. But as far as I understand Theranos never had any technology or approach that promised to lead to their goals. They just tried various stuff that never worked and lied about it. It was more like me starting a company that wants to create a battery with ten times the capacity of current batteries but having no idea how to achieve this so I take in a lot of money and desperately try to figure something out while having no promising insight .

rsynnott 5y ago
It's a step worse. It's as if you then sold that battery to electric plane manufacturers, really just gave them a standard lithium ion battery, and planes started falling out of the sky. Theranos's broken tech was used on real people and had real consequences.
_tom_ 5y ago
There's a world of difference between saying "we will do great things" and claiming "we have done great things".

hijinks 5y ago

say what you want about her but if I knew nothing about this company and someone told me the CEO got charged with a crime and she got pregnant after charges were filed. I'd almost think she is guilty and trying to get a lesser sentence because of having a kid. As a sane person the last thing I want to do is bring a child into a world where a parent could be in jail for 20 years.

aj7 5y ago

The famous picture of her taking reporters into the machine shop is one example. “Touring the machine shop” is an old trick when you want to waste time and not show anyone anything. Technically naive people don’t realize that modern machines each have a computer attached to them, and there is little proprietary in most shops.

fullshark 5y ago
I think it also makes for compelling pictures, which was her primary goal at all times: marketing.

dev_tty01 5y ago

Beyond all the fraud, lying, and deceit, the real shame is the lost opportunity and the associated colossal mismanagement. Theranos was able to marshal about a billion dollars with an overarching goal of democratizing access to health data. They basically accomplished nothing. Generating such a concentration of resources for this goal was a notable accomplishment. The subsequent arrogant (and stupid) inability to discern "hard" from "impossible" and adjust their approach to maintain some chance of success to the overarching goal was a grotesque and massive failure.

gumby 5y ago

This one point is misleading: > while it doesn’t appear that [they] barred inspectors from those rooms, keeping the doors shut certainly made it less likely that they would ask to see what’s inside. Typically during inspections, company employees are supposed to “show inspectors what they asked for,” Rosendorff said. This one point is unremarkable (at least as stated). When I was in the pharma business I was advised to have a conference room for visitors that was right off the waiting room, so we could have meetings with outsiders (i.e. inspectors) without them having to enter the facility in general. The point wasn’t to cover anything up but just avoid questions. FWIW we didn’t bother with this —- we didn’t have an “outside” conference room. But that is apparently not that unusual. State and federal inspectors get to look at anything part of the business. The federal ones can arrive armed! (Though I never saw this, only heard about it) Everything else I’ve read coming from the trial has been alarming, though I’m not following closely.

mrkramer 5y ago

She defrauded investors out of so much money, she deserves at least 10 years in prison imo.

danjac 5y ago
Frankly don't care about the investors, they won't go hungry and they should have known better. Endangering the lives of ordinary people though - 10 years isn't enough.
- mrkramer 5y ago
  But the money which was lost investing in Theranos could've been invested in other companies that would actually save the lives of ordinary people the ones that Theranos was suppose to save.
  - rsynnott 5y ago
    I mean realistically, given the timing, it would probably have been invested in Uber or that iPhone app that was just a "hey" button or something.
spaetzleesser 5y ago
There is a documentary on Frontline about cannabis. A guy had a medical marijuana license from one state. Cops in another state find a small amount of marijuana with him. He gets 5 years. Put that in proportion to a possible punishment Holmes may receive.

jdorfman 5y ago

Tyler Schultz and Erika Cheung risked it all. They saved lives by blowing the whistle knowing it could potentially ruin their careers, relationships, financial stability (lawyer fees).

jnewman23 5y ago

Wait, I thought this was a fake case stemming from structural misogyny!