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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

#431

Post by catnaroek »

mbell wrote: post #209
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…

"fake it until you make it" generally refers to the product implementation vs pitch on the consumer side. e.g. You pitch "The best automated way to do X!", but in actuality you have a horde of people doing the work initially to figure out the problem before building the actual automation. There is nothing wrong with this and remains a completely viable approach. What you don't do is tell your investors you've already…

> You pitch "The best automated way to do X!", but in actuality you have a horde of people doing the work initially to figure out the problem before building the actual automation.

It is plain dishonesty.

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

#432

Post by spaceflunky »

ericd wrote: post #333
spaceflunky wrote: post #325

Earlier quoted context omitted.

>This will wipe her out Will it though? Surely Holmes still has a few million stashed away somewhere that she can live comfortably off of? This settlement isn't going to leave her destitute. Either that or I'm sure she set up some clever offshore accounting structure that has $10M stashed in the cook islands or some shit. As soon as you get some cash, I think "rich person 101" is you set up some complicated structure…

Did she take money off the table? Not everyone does/can, even when they raise a lot.

I often wonder about this. I know founders that have instantly taken $100k off the table on a $1M angel investment. but such is silicon valley life i suppose?

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

#433

Post by googlryas »

hacknat wrote: post #317
googlryas wrote: post #300

Earlier quoted context omitted.

Was it a Ponzi scheme? I've read that he basically lost his investors money in a real investment failure, and then 'donated' some of his shares from his other, unrelated company to make the investors a profit and look good.

That’s a Ponzi scheme.

Except a Ponzi scheme repays old clients with new client funds. In this case he was paying them out of his own pocket.

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

#434

Post by danso »

cloakandswagger wrote: post #418
charlesdm wrote: post #384

Earlier quoted context omitted.

He acted against the law, and was an idiot.

Applying the law extra hard to people who are disliked by you/the general public really isn't in the spirit of our justice system. What happened to Martin is an injustice, and I'm saddened and disturbed by the people who celebrate it just because it was an injustice done against a "bad guy".

“extra hard” compared to whom?

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

#435

Post by [deleted] »

reaperducer wrote: post #391
ascendantlogic wrote: post #283

Earlier quoted context omitted.

Yes, if you want to lie about some drone-based burrito delivery service you're probably not gonna draw the same ire as life-saving medical equipment. Although if you swindle investors for over $700 million in either case I imagine the SEC will be knocking at your door eventually.

> drone-based burrito delivery service Well, I'm sold!

[deleted]

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

#436

Post by debacle »

georgeecollins wrote: post #420
throwawayjava wrote: post #234

Earlier quoted context omitted.

The "is likely to be" part is not true in general. Changing that "likely to be" into a "may be" would make the statement true(r) without the if-clause. Also if the if-clause stated "suspected of" rather than "convicted of", then the "is likely to be" part would be true in general.

Let me show why I believe what I said. I'm no expert, and I would like it if you could clarify my understanding of why you think seizure of assets is not likely. https://en.wikipedia.org/wiki/Civil_forfeiture_in_the_United...

The civil forfeiture epidemic is more localized.

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

#437

Post by toomuchtodo »

Frondo wrote: post #381
mbell wrote: post #209

Earlier quoted context omitted.

"fake it until you make it" generally refers to the product implementation vs pitch on the consumer side. e.g. You pitch "The best automated way to do X!", but in actuality you have a horde of people doing the work initially to figure out the problem before building the actual automation. There is nothing wrong with this and remains a completely viable approach. What you don't do is tell your investors you've already…

If I, an investor, give you money because you tell me you have automated technology, but really it's people in a room, that's a lie and there is absolutely something wrong with it!! If you can make the automated technology before I find out, well, maybe I won't sue you, but that sure doesn't make it right or acceptable.

If you say it’s automated, and it’s not, that’s fraud.

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

#438

Post by ericd »

dnautics wrote: post #378
ericd wrote: post #326

Earlier quoted context omitted.

That's one way to get funding, but it's certainly not the only way, there are lots of counterexamples. As one obvious counterexample, one of the founding principles of YC is providing an open application process to provide people who don't have any personal connections access to the SV network. Larry and Sergey weren't well connected when they started, either, afaik, as most PhD students aren't. If you're doing somet…

I think incorrect (or even correct, but rare) narratives are dangerous. Especially when they're the feel-good type that people tell to make themselves feel better about the way the world works. (meritocracy, egalitarianism, etc) Anecdata, but: I left academic hard science because I realized it was too difficult to get ahead; moved to the bay since I can code and it was a way to create a runway and find myself, and pi…

Being good at making connections and being seen as capable and trustworthy enough by your existing connections is absolutely a form of merit, an important one if you want to marshal enough people and resources and investors to build a successful company. My point was that the seemingly common mentality of "you have to be born into it, the rich only help the rich, etc" is not true, it's not a useful belief, and the counterexamples are not rare. It can help, certainly, but it's not a requirement by any stretch.

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

#439

Post by EpicEng »

RoyTyrell wrote: post #229

Good. While they had a good idea, it's run by unethical and terrible people who really have no regard for the safety of the public. It seems like every time they were forced to show any level of proof they lied until they were caught. If a pharmaceutical company operated like they do, I doubt anyone would be praising them for any reason.

What was the good idea exactly? As far as I'm aware the details of their (non-existent) tech have never been shared, not even with investors. Anyone can think up some pie in the sky idea.

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

#440

Post by [deleted] »

joering2 wrote: post #370
ericd wrote: post #326

Earlier quoted context omitted.

That's one way to get funding, but it's certainly not the only way, there are lots of counterexamples. As one obvious counterexample, one of the founding principles of YC is providing an open application process to provide people who don't have any personal connections access to the SV network. Larry and Sergey weren't well connected when they started, either, afaik, as most PhD students aren't. If you're doing somet…

> Larry and Sergey weren't well connected when they started, either, afaik, as most PhD students aren't. Doubt it. I don't think In-Q-Tel/CIA will write you a check because you just happen to have this shiny new search engine that may or may not change the world.

[deleted]
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