Matt Levine is a national treasure.
Theranos Misled Investors and Consumers Who Used Its Blood Test
61–70 of 104 posts
Re: Theranos Misled Investors and Consumers Who Used Its Blood Test
#62Earlier quoted context omitted.
On the "Delusion Con Artist" continuum, I'm inclined to think she's more on the delusion end. If your intent is to defraud, you'd want to avoid a domain that's 1) scientifically accountable, and 2) subject to heavy oversight and regulation. She seems smart enough to know that. This Vanity Fair piece provides a fair amount of character background: https://www.vanityfair.com/news/2016/09/elizabeth-holmes-the...
It also takes a borderline impossibly strong will to have someone look at you, say "You're brilliant, and I want to give you money", and reply "No." Especially when there are others around you who (for their own profit) are echoing the same things. I decided in undergrad that Honors programs exhibited a lot of the same characteristics. Kids in those tracks are treated with velvet gloves by professors, come to believe…
Richard Feynman's famous quotation is applicable here: "The first principle is that you must not fool yourself — and you are the easiest person to fool".
False positives are often more dangerous than false negatives. This is why the "fake it until you make it" trope can come back to bite you in the read end.
Re: Theranos Misled Investors and Consumers Who Used Its Blood Test
#63Part of me dislikes the title "Blood Unicorn" for being sensationalist, but part of me really likes it for being completely accurate and even a little bit poetic. It kind of feels like all titles should strive for this balance, but I also kind of hate it. I'm sure there's a German word for what I'm feeling!
FYI, the author regularly discusses unicorns in his daily column, and often gives them funny/appropriate names. E.g. Blood Unicorn for Theranos, Decacorn for Unicorns over 10b in value, and other ones I can't remember now.
Re: Theranos Misled Investors and Consumers Who Used Its Blood Test
#64Earlier quoted context omitted.
Fair but she might be a clueless rube who got played...
Played by who? Who made money on Theranos? Anyone who knew it was a fraud wasn't going to profit from investing. They wouldn't be able to cash out before the product failed at market. Maybe a supplier would profit from selling supplies, but not the investor/advisors.
While I don't think the investors/advisors were necessarily in on this, you're actually mistaken here.
First of all, an advisor could certainly be making money just by drawing a salary or any other compensation. As did Elizabeth Holmes, actually, who drew a salary of 200k (not very large for a CEO, I believe, but certainly this is a very real compensation she got from the fraud).
As for investors, theoretically speaking, early round investors could've sold their shares to later round investors and cashed out.
Again, I'm speaking hypothetically here - I assume there weren't that many people involved in the fraud, just by virtue of the fact that it was kept alive for many years and it's hard to get many people to keep a secret.
Re: Theranos Misled Investors and Consumers Who Used Its Blood Test
#65Earlier quoted context omitted.
Fair but she might be a clueless rube who got played...
Played by who? Who made money on Theranos? Anyone who knew it was a fraud wasn't going to profit from investing. They wouldn't be able to cash out before the product failed at market. Maybe a supplier would profit from selling supplies, but not the investor/advisors.
'Although Holmes settled her complaint with the SEC Wednesday, agreeing to a broad series of penalties without admitting guilt, Balwani did not settle with SEC, which will continue investigating him'.
'Theranos' board heft was anchored to a 2011 meeting Holmes had with former secretary of state George Shultz, who after joining the board recruited his fellow former secretary, Henry Kissinger. Other notables around the table were former U.S. senators Sam Nunn and Bill Frist, former secretary of defense William Perry, and James Mattis.
Mattis came up in the SEC's investigation. It found that while Mattis was leading the U.S. Central Command he lobbied for Holmes' tech to be used in the military, though regulators flagged issues before the notion took wing. Mattis resigned from Theranos' board when he become U.S. Defense secretary in 2016'.
https://www.usatoday.com/story/tech/news/2018/03/15/behind-t...
Re: Theranos Misled Investors and Consumers Who Used Its Blood Test
#66As she long is able to dodge criminal charges, I think she got away with a slap on the wrist. A $500,000 fine and returning most of her Theranos equity is hardly proportionate punishment for a supposed-$700M fraud.
By comparison, Shkreli is going to prison over a mere $10M fraud.
Shkreli fought it - she took the deal.
Re: Theranos Misled Investors and Consumers Who Used Its Blood Test
#67Earlier quoted context omitted.
By comparison, Shkreli is going to prison over a mere $10M fraud.
Shkreli fought it - she took the deal.
Oh, wow..
Honest question: I know that plea deals and other rather arcane behind-the-scenes agreements are a thing, but as someone who is not all too familiar with the American justice system, is that really the only relevant difference?
So, what kept Shkreli from taking a deal?
Re: Theranos Misled Investors and Consumers Who Used Its Blood Test
#68[deleted]
Re: Theranos Misled Investors and Consumers Who Used Its Blood Test
#69I have been a voice in the wilderness since about 2007 on this one, so this is shadenfraude on a level that makes me kind of embarrassed about myself. My background is biomedical engineering, and I just never, ever understood how the sampling rate could ever work. If you're looking for a low-energy signal and your sampling rate is really low, you're just going to miss it and this should've been screamingly obvious to…
Existing analysers already use very small samples. See Siemens Advia 1800 specs under "Microvolume Technology" https://www.healthcare.siemens.com/clinical-chemistry/system... It only uses 30ul of sample to run up to 15 assays. How is that any different from what Theranos was doing? Only difference is that you collect a bigger vial when using the Siemens machine. And then don't use most of it. So why not collect a sma…
There are a few reasons you collect a full vial instead of a tiny one:
1. Multiple tests. Most people aren't going to the doctor for a single test. A majority of the testing is Comprehensive Metabolic Panels, which covers 20-30 different things at least. Many patients get a CMP plus other stuff, so enough is drawn for all the tests at once.
2. Possible retesting. There are dozens of things that can go wrong between drawing the blood and sending a result to the doctor. Maybe a tech drops the tube and spills some blood out. Maybe the machine has a problem mid-test and you have to rerun the samples after it's fixed. Maybe the patient has a critically high/low range of something and you need to retest for confirmation. The worst possible scenario for a lab is to have to call the patient back in for more blood, because that causes patient pain and could make the doctor start using a different lab if they're perceived as unreliable. There's actually a legal requirement for labs to store blood for a week after testing, just in case.
3. Different test requirements. The CMPs usually test the serum only (i.e. your blood gets put through a centrifuge), but there are a variety of tests that run on whole blood. Because of the possible re-testing above, and because whole blood test samples need to have anticoagulant added, you'll usually have two separate tubes drawn for whole blood vs. serum tests.
Re: Theranos Misled Investors and Consumers Who Used Its Blood Test
#70Is there any data on how much the executives of Theranos profited while trying to produce these blood tests?