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Theranos, CEO Holmes, and Former President Balwani Charged with Fraud

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Re: Theranos, CEO Holmes, and Former President Balwani Charged with Fraud

#71

Post by ebbv »

jonwachob91 wrote: post #28
ebbv wrote: post #19

Take a TV from a truck that's left open behind a warehouse; get months if not years in jail. Deliberately commit fraud for years and steal millions and millions of dollars; slap on the wrist. Our system is so ridiculous.

The SEC is a civil agency and can not jail anyone for anything, they can only levy penalties. Justice has to take over the case for an offender to go to prison.

Do you think they will? Do you think Holmes and the others at Theranos responsible for the fraud will get any jail time?

Maybe that's coming but it doesn't seem like it, and that's the point of my comment. I didn't say "The SEC sucks", I said the system sucks.

Re: Theranos, CEO Holmes, and Former President Balwani Charged with Fraud

#72

Post by pron »

vasilipupkin wrote: post #52
enlightenedfool wrote: post #32

Earlier quoted context omitted.

Yeah, it's easy for the government to threaten plebs with prison for misreporting a few thousands in taxes...because they can't defend themselves like Holmes does.

let's dispense with political bullshit. A protracted lawsuit would cost the government millions of dollars with an uncertain outcome. Instead, Holmes is paying the government 500K and returning shares. The SEC is going to court against Balwani, where the case is presumably stronger. the plebs is strictly better off and not everything the government does is bad.

Saying that people are better off with a quick resolution rather than a court case is also a political statement, as it's an opinion on what we as a society should value.

Re: Theranos, CEO Holmes, and Former President Balwani Charged with Fraud

#73

Post by rabidonrails »

asperous wrote: post #57
ChuckMcM wrote: post #23

Ok, this is the money line in that press release for me: “The charges against Theranos, Holmes, and Balwani make clear that there is no exemption from the anti-fraud provisions of the federal securities laws simply because a company is non-public, development-stage, or the subject of exuberant media attention.” For all those entrepreneurs are trying to "fake it until you make it" be aware that the SEC considers your…

I think there is a significant difference between lying about what you can do (fraud) and simply saying you hope to accomplish something.

Agreed. Here's the support to you:

The complaints further charge that Theranos, Holmes, and Balwani claimed that Theranos’ products were deployed by the U.S. Department of Defense on the battlefield in Afghanistan and on medevac helicopters...[i]n truth, Theranos’ technology was never deployed by the U.S. Department of Defense...

Re: Theranos, CEO Holmes, and Former President Balwani Charged with Fraud

#74

Post by lxm »

ChuckMcM wrote: post #23

Ok, this is the money line in that press release for me: “The charges against Theranos, Holmes, and Balwani make clear that there is no exemption from the anti-fraud provisions of the federal securities laws simply because a company is non-public, development-stage, or the subject of exuberant media attention.” For all those entrepreneurs are trying to "fake it until you make it" be aware that the SEC considers your…

I interpreted it somewhat differently. The money paragraph seems to be

> claimed that Theranos’ products were deployed by the U.S. Department of Defense on the battlefield in Afghanistan and on medevac helicopters and that the company would generate more than $100 million in revenue in 2014. In truth, Theranos’ technology was never deployed by the U.S. Department of Defense and generated a little more than $100,000 in revenue from operations in 2014.

This was not even a forward-looking statement, it was an outright lie in the legal document.

One can do pretty much whatever they wish with accredited investors' money, but it has to be disclosed in the PPM.

Even if you have a line item where all the money will be spend on CEO's dog's private jet travel, accredited investors who have reviewed and signed the PPM have no legal recourse.

In Theranos case it looks like a straightforward misrepresentation of facts, which is a red flag for SEC.

Re: Theranos, CEO Holmes, and Former President Balwani Charged with Fraud

#75

Post by pinewurst »

minimaxir wrote: post #46
ChuckMcM wrote: post #23

Ok, this is the money line in that press release for me: “The charges against Theranos, Holmes, and Balwani make clear that there is no exemption from the anti-fraud provisions of the federal securities laws simply because a company is non-public, development-stage, or the subject of exuberant media attention.” For all those entrepreneurs are trying to "fake it until you make it" be aware that the SEC considers your…

It's worth nothing that one of Theranos's VC funders, Tim Draper, did defend Holmes despite the fraud allegations: https://news.ycombinator.com/item?id=11973102 https://www.vanityfair.com/news/2017/01/theranos-investor-cl...

Also Dan Warmenhoven, speaking for the board.

Re a previous Holmes forfeiture: "Warmenhoven added Ms. Holmes showed “a level of selflessness and grace reflecting her commitment to the company’s success.”

Re: Theranos, CEO Holmes, and Former President Balwani Charged with Fraud

#76

Post by briandear »

charlesdm wrote: post #20
daxorid wrote: post #14

Earlier quoted context omitted.

Alternative take: it's disgusting and offensive to the foundational concept of blind justice that punishment is more highly correlated with charisma and obsequiousness to judges than it is to actual crimes committed.

It comes down to basic human decency. Of which he has none. And that does not make him very likeable. You can raise drug prices like he did and do it in a moral way. He was basically laughing in people's faces about what he did. I agree courts, juries and judges are to be neutral, but a person like him just ends up getting under most people's skin. Even if there was no rational decision to go hard on him, I wouldn't…

Not being decent isn’t a crime. Fraud, however is. The FBI should recommend charges for this Holmes lady.

Re: Theranos, CEO Holmes, and Former President Balwani Charged with Fraud

#78

Post by pron »

daxorid wrote: post #14
charlesdm wrote: post #10

Earlier quoted context omitted.

Martin Shkreli was, honest to god, an idiot. He got several chances to "kiss the ring" and show remorse, and what did he do? He put some extra oil on the fire and kept acting like an idiot until the very last moment. Sometimes you need to realise when to fold and suck it up.

Alternative take: it's disgusting and offensive to the foundational concept of blind justice that punishment is more highly correlated with charisma and obsequiousness to judges than it is to actual crimes committed.

Publicly showing deference to society's rules and values is not offensive to the concept of justice.

Re: Theranos, CEO Holmes, and Former President Balwani Charged with Fraud

#79

Post by SilasX »

georgeecollins wrote: post #22
nathanaldensr wrote: post #2

Theranos and Holmes have agreed to settle the fraud charges levied against them. Holmes agreed to pay a $500,000 penalty, be barred from serving as an officer or director of a public company for 10 years, return the remaining 18.9 million shares that she obtained during the fraud, and relinquish her voting control of Theranos by converting her super-majority Theranos Class B Common shares to Class A Common shares. Du…

If you are convicted for drug trafficking or plead guilty to it, any asset that you can't prove you received through other legal means is likely to be subject to seizure.

Isn't that also true without your if-clause?

Re: Theranos, CEO Holmes, and Former President Balwani Charged with Fraud

#80

Post by AndrewKemendo »

ChuckMcM wrote: post #23

Ok, this is the money line in that press release for me: “The charges against Theranos, Holmes, and Balwani make clear that there is no exemption from the anti-fraud provisions of the federal securities laws simply because a company is non-public, development-stage, or the subject of exuberant media attention.” For all those entrepreneurs are trying to "fake it until you make it" be aware that the SEC considers your…

Lets not pretend that everyone isn't just following the leaders here with grandiose messaging. Major tech corporations have done this as much as small startups.

IBM's Watson comes immediately to mind.

The difference is whether or not you can come through with some percentage of your promises. The ones who can eek out some kind of repeatable traction long enough to exit are successes, the ones who never get to scale are frauds.

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