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We Shouldn’t Be Surprised at the Theranos Fraud

nautil.us

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Re: We Shouldn’t Be Surprised at the Theranos Fraud

#141

Post by notahacker »

madaxe_again wrote: post #135
kumarvvr wrote: post #26

The most amazing thing about this whole situation is that there were experts in the field who were shouting out about the impossibility of Holmes' claims right from the beginning. The media, though, never paid enough attention (or was possibly subverted by Theranos itself) to the naysayers. These incidents ought to remind us the exponentially important role media plays in our lives and how important it is that we com…

What I find truly amazing is that both Kissinger and Mattis were board members, and were party to this grand pump-and-dump, and seem to have escaped any consequence or notice. Holmes, while equally culpable, appears to be taking the entire fall. I wonder what she’s getting in return - a cabinet position in a few years once the dust has settled, I’m wagering.

There might be numerous legitimate reasons to dislike Kissinger and Mattis going well beyond Theranos, but suggesting they're as culpable for being hired to promote something they didn't understand to the military as the person who conceived and masterminded the fraud is stretching it a little far. I imagine Kissinger and Mattis' reputation would have taken a bigger hit if it didn't already have much bigger black marks against it.

Re: We Shouldn’t Be Surprised at the Theranos Fraud

#144

Post by mseebach »

shub wrote: post #124
monkeypizza wrote: post #67

Earlier quoted context omitted.

If you don't give him credit for that, what would you give him credit for? If he stopped Carreyrou, you'd obviously blame him. Therefore in order for your judgement to be meaningful, you have to admit that him allowing Carreyrou to go ahead and topple the house of cards was a good action. Otherwise no matter what he does you judge him negatively - and in that case, your decision is predetermined and not of informatio…

Refraining from being horrible is not the same thing as doing something good.

No, but refraining from taking an action that's well within your power to take, possibly with minimal consequences, and which you have a strong incentive to take, is sign of integrity. I don't know if that's "getting credit", but having integrity is clearly a good thing.

On the other hand, it could simply be shrewd businessmanship. It's not like it was the reporting that made Theranos unviable. The tech would never work, it's just a question of time before the walls come crashing down. It's probably illegal for Murdoch to sit on this information while trying to sell his investment on to someone else (at the very least, inviting some nasty lawsuits).

Murdoch might very well have thought "Oh well, the investment is gone, I'll be damned if it isn't my newspaper to be the one to break this juicy news".

Re: We Shouldn’t Be Surprised at the Theranos Fraud

#145

Post by rjkennedy98 »

edanm wrote: post #131
kumarvvr wrote: post #26

The most amazing thing about this whole situation is that there were experts in the field who were shouting out about the impossibility of Holmes' claims right from the beginning. The media, though, never paid enough attention (or was possibly subverted by Theranos itself) to the naysayers. These incidents ought to remind us the exponentially important role media plays in our lives and how important it is that we com…

> The media, though, never paid enough attention (or was possibly subverted by Theranos itself) to the naysayers. This is not the most amazing thing, at all. I'm not surprised that "the media" with their limited access, didn't get the full story. Rather, I'm more surprised about the informed investors, who invested a lot of money, and had access or at least the ability to push for it. How did they invest so much mone…

My brother who is a pre-med student was able to figure out that Theranos was full of it without any special access way before the media broke the story.

When Stanford Professor John Ioannidis refuses to join your board because he refuses to give your product credibility that is a HUGE red flag.

Re: We Shouldn’t Be Surprised at the Theranos Fraud

#146

Post by psergeant »

pseingatl wrote: post #19

But we can be very surprised at the disparity in treatment between Theranos execs, who got off scott free, and Pharma Bro, who made all his investors whole and still got prison.

Pharma Bro needs to go to prison to stop the next arrogant idiot who thinks he can dig himself out of a hole from attempting to do so.

That he actually managed to is great — for his investors — but it’s not a course of action society wants to promote.

Re: We Shouldn’t Be Surprised at the Theranos Fraud

#147

Post by timoth3y »

ThrustVectoring wrote: post #69
timoth3y wrote: post #65

It's not unique to Theranos. It's all part of the perverse incentives involved with well-funded tech companies. There is no real incentive to call out fraud. As an investor or a partner you might pass on a deal, but to go public with your concerns means risking a possible lawsuit, raising the ire of the people who are already on the bandwagon, being excluded from future deals, and being dismissed as someone who is ou…

Short traders and put option holders have to also get the timeline and technical factors right to get paid. See the debacle with LongFin. The right play was to go long and make money off borrow fees. The bears got hosed by a trading freeze that kept them from closing their shorts or from acquiring shares to sell for their expiring put options.

True. That's why so many of them try to "leak" the problem to journalists after they have taken their short positions.

I mean it's not a perfect system, but at least in the public markets, there is some financial incentive to expose deception.

Re: We Shouldn’t Be Surprised at the Theranos Fraud

#148

Post by psergeant »

jcranmer wrote: post #68
kumarvvr wrote: post #61

Earlier quoted context omitted.

Why so much hate for Tesla? Maybe Elon is over confident, over enthusiastic, short sighted, etc. but his vision is world class and world changing. And he has delivered, consistently.

Substitute Elon Musk and Tesla (particularly back in 2017) with Elizabeth Holmes and Theranos back in 2014, before the big exposés started coming out. From the perspective of the lay investor, what distinguishes the two cases? This goes to answer both your comment and (at present) the top comment of this post, which asks why people ignore a chorus of naysayers saying that what's being done is impossible. The entire m…

> From the perspective of the lay investor, what distinguishes the two cases?

You can buy a Tesla car today, strip it down, and confirm it works and isn’t a giant Potemkin village?

Re: We Shouldn’t Be Surprised at the Theranos Fraud

#149

Post by tragic »

Cthulhu_ wrote: post #133
cowpig wrote: post #58

Earlier quoted context omitted.

He gets credit for not doing something extremely unethical that would have been quite risky, probably stupidly so (because it would bring him into the controversy)?

Would controlling the media to influence an investment you hold stock in be considered illegal? Similar to insider trading?

I believe so: consider the City Slickers case[0].

Those guys were journos, not proprietors, but I'm pretty sure that if you could prove that a proprietor put heavy manners on the journos to do that, they would certainly be up for a criminal conspiracy charge, at least in Britain. Of course, that is typically a pretty big 'if'.

[0]: https://en.wikipedia.org/wiki/James_Hipwell

Re: We Shouldn’t Be Surprised at the Theranos Fraud

#150

Post by stult »

laughinghan wrote: post #109
donbright wrote: post #99

Earlier quoted context omitted.

The Wall Street Journal is the only reason the company was outed. This same journal was also one of her early boosters. We already have a framework that preserves independence of the media, the First Amendment. All of the NDAs and Boies style intimidation and legal abuse and harrasment of the whistleblowers and journalists was only stopped by the First Amendment. We already have a framework that punishes journalists…

I am under the impression that it is rare for journalists in America to be murdered for their stories, is that not the case? None of your examples are journalists being penalized for lack of due diligence or for being misleading. I think your instinct to protect journalists given their importance and the threats they face is a healthy and important one, and I share it, but I don’t think they’re above reproach. Ensuri…

>None of your examples are journalists being penalized for lack of due diligence or for being misleading

Rolling Stone after the lacrosse rape case is one example. But more importantly, I think the point above is that journalism is in a vulnerable position where the carrot is more appropriate than the stick. Laws are crude tools for the most part, with lots of potential for collateral damage. It's like chemotherapy: you just hope the treatment kills the good cells slower than the bad.

Punishing bad journalism will have a chilling effect on all journalism, bad or good. It'll increase the costs of doing business by increasing liability insurance premiums. If the industry were thriving, maybe that would be acceptable overhead. But it's not thriving. It's teetering on the edge of collapse. So maybe we should find ways to identify and reward good journalism. Cultivate the flowers in the garden so they overshadow the weeds, rather than dousing the whole shebang in herbicide and hoping you kill what you intend to.

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