I'm not a lawyer, but I'm pretty sure this is not nearly as gray an area as you think. Have you ever read an IPO prospectus or a quarterly report from a public

I'm not a lawyer, but I'm pretty sure this is not nearly as gray an area as you think. Have you ever read an IPO prospectus or a quarterly report from a publicly traded company? They include big lists of risks that can all threaten the performance of the company. Those are there because you have to be truthful with your investors. If you lie to raise money, that's fraud. If it doesn't actually already work and you tell them it does, it's a problem. What I think in this case is that it's a pity that she wasn't prosecuted for threatening people's health with unreliable test results. They didn't "run out of runway" while in research mode: they were already selling a defective product that is safety-critical. Google Jean-Louis Gasse's piece on his personal experience with Theranos results. It was incredibly callous to gamble with people's lives that way. I do understand that it was easier to prosecute the financial crimes, but it's still unsatisfying that they were not held to account on those actions.