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Elizabeth Holmes found guilty

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Re: Elizabeth Holmes found guilty

#201

Post by berberous »

jonwachob91 wrote: post #40

It blows my mind that she was found guilty for defrauding investors, but not guilty for defrauding patients about their test results. Investors know that every dollar they put into a company could disappear, it's why startups get capital from investors and not bank loans. But a patient does not expect for their blood test results to be completely wrong. Her tests weren't giving false-negatives or false-positives, the…

>> Investors know that every dollar they put into a company could disappear, it's why startups get capital from investors and not bank loans.

The above does not excuse fraud. Investors know their investments are risky, but that does not give you permission to deliberately lie or mislead, with an intent to deceive the potential investor.

For example, if you tell investors that you anticipate getting $50M in new contracts over the next year, well, assuming you mean it in good faith, that's not fraud even if it doesn't pan out or was delusional to begin with.

If you tell an investor you just signed a contract for $50M, in order to get them to invest, and that's a total lie, that's fraud. Whether or not the investor did appropriate due diligence to confirm that fact or not, it's still criminal.

Re: Elizabeth Holmes found guilty

#202

Post by dopamean »

neom wrote: post #136
latenightcoding wrote: post #101

Question: could Holmes have avoided all of this by pivoting to something else and not losing investors money. It is extremely common for startups to exaggerate their tech just to later pivot to something else without any repercussions.

I followed the case very closely, read the transcripts I could find daily etc. What Elizabeth did wasn't far from what many many many founders do. This was held to a legal standard, sure, but let's be real here... since when was the legal standard the SV standard? Is SV really the bastion of morality and legal ethics? Is that the new norm, good behaviour? Notably some investors refused to participate and iirc Draper…

> What Elizabeth did wasn't far from what many many many founders do

I'm not sure this is true. She told a lot of egregious lies to investors while trying to get money from them. She repeated those lies in the press and to anyone who questioned it. And I don't mean a lie like lying that your product is more effective than it is. I mean she told prospective investors about huge contracts with the defense department that did not exist. She told investors that her machines were being use in the battle field. These were lies that were never going to be true.

Re: Elizabeth Holmes found guilty

#203

Post by bryan0 »

celticninja wrote: post #64
hn_throwaway_99 wrote: post #52

Earlier quoted context omitted.

Don't know all of the details behind each count, but glad to see this result, which seems good and fair. Basically, looks like the majority of "committing fraud against investors" charges were guilty, but the "committing fraud against patients ", which always seemed like more of a stretch to me, were not guilty.

I wonder if that was because they used other testing methods to check patient samples, so they patient got a result regardless of the means by which it was obtained.

Patients were affected by inaccurate results: https://www.theverge.com/2021/9/21/22687026/theranos-patient...

Re: Elizabeth Holmes found guilty

#204

Post by GhostVII »

jonwachob91 wrote: post #40

It blows my mind that she was found guilty for defrauding investors, but not guilty for defrauding patients about their test results. Investors know that every dollar they put into a company could disappear, it's why startups get capital from investors and not bank loans. But a patient does not expect for their blood test results to be completely wrong. Her tests weren't giving false-negatives or false-positives, the…

There was pretty strong evidence she defrauded investors, lots of hard evidence of her making claims that we now know aren't true. I haven't heard much strong evidence that she intentionally defrauded patients though. I think it is totally possible that she lied to investors about Theranos's capabilities (ex. How many tests they could run), while still thinking that the tests they were running were accurate.

Re: Elizabeth Holmes found guilty

#205

Post by javajosh »

dmazin wrote: post #119
javajosh wrote: post #51

Earlier quoted context omitted.

I don't remember where I first heard this, but it's good advice: don't collect as an investment, collect because you really enjoy the objects. I collect rare books, but never because I think they'll go up in value (although they probably will). I just like having them around. Socially, infamous corpo-swag is really even better - what a conversation starter! But I personally wouldn't want that sort of stuff in my shar…

Cool! Do you focus on any subjects? Also, have you seen The Booksellers? It took me a while to realize I was collecting books. Before, the way I thought of it was "I would never walk past an out-of-print book about computing history! I might never come across it again!" But now I am a bit more focused on the collection aspect, for example, there are now specific titles and authors that I seek out.

I have a good collection of old science books. One of my favorites is called "The Perfect Woman", publish in 1896, and it is a manual for women. It's precisely as horrifying and unintentionally hilarious as you would expect. But mostly I collect early editions of my favorite stories, or occasionally limited editions like from Subterranean Press. And no, I have not seen The Booksellers. I got into this because as a kid I'd buy a lot of books from our neighborhood used book dealer, mostly cheap science fiction paperbacks. I've tried ebooks a couple of times, and I just don't like them. I wish I did because it's highly convenient. But I just really prefer paper. For one thing you can give away your book when you're finished with it, or loan it to a friend, neither of which you can do with an ebook.

Re: Elizabeth Holmes found guilty

#206

Post by sharkweek »

wrs wrote: post #112
meetingthrower wrote: post #36

Earlier quoted context omitted.

One of my biggest regrets is not getting a Kozmo messenger bag from dotcom 1.

One of my prized possessions is a Kozmo-branded CD opener, which I got by ordering a single CD from Kozmo, with free one-hour delivery. Thanks, venture capital!

Yes! Double points for a dead company logo on a tool now so nearly useless

Re: Elizabeth Holmes found guilty

#207

Post by paxys »

throwawaylinux wrote: post #182
mertd wrote: post #116

Earlier quoted context omitted.

Maybe don't fake "medical devices" till you make it.

She was not found guilty on any charges of harming or swindling patients. This was about the wealthy investors. They will come after you whether you fake medical devices or bombs.

The Justice Department was only interested in the case because Theranos operated in a highly regulated industry with lots of government oversight. SaaS and consumer tech startup founders lie and cheat and blow up investor money every day and no one really cares.

All the wealthy investors gain nothing from Holmes going to jail. In fact the lengthy trial only drags them into the spotlight, which they'd rather stay clear of.

Re: Elizabeth Holmes found guilty

#208

Post by annoyingnoob »

sharkweek wrote: post #25

This will sound weird but I am a collector of swag from large companies that have collapsed due to anything from mismanagement to outright fraud. While we're a rare breed there are others like me out there. Still, even with this oddly specific marketplace being small, let me tell you, the Theranos swag market is hot right now (check eBay if you're curious). Wish I had gone big on this one earlier, because I have a fe…

Collector or Speculator?

Re: Elizabeth Holmes found guilty

#209

Post by chaxor »

It's interesting that it took so long for this to finally be resolved, such that now - the technological goals that they had may actually be surmountable soon. I wonder what Theranos 2.0 will be called when it cross up in a few years. FBhealth ? BioBezosBot ? AppleSeq ? GoogleBlood ? NetStix ?

Re: Elizabeth Holmes found guilty

#210

Post by kstrauser »

neom wrote: post #136
latenightcoding wrote: post #101

Question: could Holmes have avoided all of this by pivoting to something else and not losing investors money. It is extremely common for startups to exaggerate their tech just to later pivot to something else without any repercussions.

I followed the case very closely, read the transcripts I could find daily etc. What Elizabeth did wasn't far from what many many many founders do. This was held to a legal standard, sure, but let's be real here... since when was the legal standard the SV standard? Is SV really the bastion of morality and legal ethics? Is that the new norm, good behaviour? Notably some investors refused to participate and iirc Draper…

> people are having success with her ideas today

Citation needed. The whole concept has a critical flaw, as pointed out by her engineering staff and medical advisors: blood tests require a certain minimum volume of blood to work, and that's inescapable because blood components are discrete, not continuous.

For example, a drop of blood is about .05mL, or about 1/20th of a milliliter. A common testing sample size in a normal lab is 3mL, or about 60x larger what Theranos claimed they could work with. Now, suppose you're testing for some cell that's may be present in concentrations of 10 per mL, or 1 per .1mL blood volume on average. In a conventional lab, then, you'd probably have about 30 of those in the 3mL sample. In a Theranos lab, even if it worked perfectly, you're equally likely to have either 0 or 1 present in the .05mL sample. In other words, you're 50% likely to get a false negative, even if the equipment is working perfectly, based purely on the tiny sample volume.

By analogy, if you poll 100,000,000 Americans, you might get a pretty good idea of an election's result. If you poll 3, you have no idea, even if the poll is perfectly designed. Well, that's what Theranos was up against.

NB: I'm not a lab tech, and the above is my understanding of it. That's my distillation of a lot of articles I read about Theranos, such as https://theconversation.com/the-rise-and-fall-of-theranos-so... .

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