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Elizabeth Holmes found guilty

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Re: Elizabeth Holmes found guilty

#501

Post by bee_rider »

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…

Is this actually the end of her legal trouble? I assumed they were pushing the financial stuff because it is relatively easy to prove, and would go after her for more serious medical crimes over time.

Re: Elizabeth Holmes found guilty

#502

Post by Shacklz »

hn_throwaway_99 wrote: post #492
seehafer wrote: post #187

Earlier quoted context omitted.

From former AUSA, and current white-collar defense attorney Ken White: "She faces a max of 65 years (3x20 + 1x5). And it's not at all clear she'll do less than 20." Apparently the sentences will not necessarily be served concurrently. https://twitter.com/Popehat/status/1478170494130003976?s=20

Argh! The linked NPR article on that tweet had me yelling at my phone: > It is unusual for tech executives to face criminal changes when their startups collapse under the weight of unrealized promises. That's because it's not illegal to over promise about your future results. It is illegal to lie about simple facts regarding the present state of your business to attract funding. I'm so sick of so many press outlets f…

> No, Theranos was outright, egregious fraud, and most startups that "collapse under the weight of unrealized promises" are not committing fraud.

Most startups don't get the traction and publicity that Theranos got, however. I wouldn't be surprised if a lot of founders would go to similar lengths given the chance; they just happen to have someone apply some reality check on them before things get out of hand.

Re: Elizabeth Holmes found guilty

#503

Post by hn_throwaway_99 »

chihuahua wrote: post #385
berberous wrote: post #201

Earlier quoted context omitted.

>> 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 contra…

In one sense you are correct, just because investors are knowingly making speculative investments, that doesn't make it OK to defraud them. On the other hand, perhaps the argument was that investors know there's a risk and know they should be skeptical. It would be unreasonable to expect patients requesting a blood test to be suspicious and question the results.

> On the other hand, perhaps the argument was that investors know there's a risk and know they should be skeptical.

If you've ever dealt with competent VCs, they are very skeptical, which is why they pretty much ignore your forward looking statements and just look at your current data. And the reason they do that is because forward looking statements can be all kinds of BS, but current data is just facts (unless you're lying about them, in which case it's fraud).

Of course, they also want to know your vision and drive for the future, but they'll basically ignore statements like "We have 10 big deals I'm the pipeline" and just say "How many signed contracts do you have?"

Re: Elizabeth Holmes found guilty

#504

Post by stickfigure »

creato wrote: post #498
metadat wrote: post #250

Earlier quoted context omitted.

Hopefully she'll get more, SV could use a good example. Otherwise it signals that wantrepeneurs can keep doing it with minimal repercussions.

Can you name another "wantrepeneur" that needed deterring by this case? I don't follow startups that closely. The only example I can think of is Elon Musk's "full self driving" promises, but the gap between promise and reality is a lot smaller in that case. Even then, the claims are still mostly future timelines, not "it works now, no I can't show you, trust me!!"

The Ozy Media guy seems similar enough. Blatantly lying to investors about the current facts of the business to extract money from them.

Re: Elizabeth Holmes found guilty

#505

Post by tschwimmer »

dehrmann wrote: post #223
paxys wrote: post #140

Guilty of taking a billion+ dollars from rich and influential people who couldn't bother to do the bare minimum due diligence into their investments due to greed and FOMO. Not guilty of endangering thousands of lives by running fraudulent and inaccurate tests under sub-par lab conditions. Our justice system is such a farce.

As another comment said, patients' tests were apparently run on regular machines, so the patients weren't harmed.

This is trivially false. From the linked article:

"When Theranos' machines were rolled out to Walgreens stores in California and Arizona, they gave patients false or flawed results. One patient testified that she was led to believe she was having a miscarriage after taking a Theranos test, when indeed her pregnancy was viable. Another patient thought her cancer had returned when it had not, following a test. But in the end, jurors did not believe that Holmes intentionally deceived patients."

These examples by themselves are clear instances of harm. However, it's not unlikely that more patients were affected and perhaps even some of them took actions that were harmful to their health based on this false data.

Re: Elizabeth Holmes found guilty

#506

Post by hn_throwaway_99 »

petilon wrote: post #27

Some founders "fake it till you make it", and this news should serve as a cautionary tale.

No, no, no. I see this all the time around Theranos ("Hey, there are lots of other fake-it-til-you-make-it companies out there, Theranos just went to extremes"), and I don't think it's accurate, at all.

The line around fraud is really not that gray. If you're lying about current facts for personal gain, that's fraud. You can hype all you want about the future, and most VCs are actually fine with you selling them the "yeah, it's hamster wheels in the backend now, but just wait until we build out our tech and scale!" line (just see all the well funded "AI" startups that just have legions of people "training" the AI), but if you say that it's the whizbang tech right now, but it's really just hamster wheels, that's fraud.

Fraud is not just an extension of "aggressive selling".

Re: Elizabeth Holmes found guilty

#507

Post by manquer »

jasonfarnon wrote: post #431
manquer wrote: post #370

Earlier quoted context omitted.

First Equal Protection clause from the 14th Amendment applies to only states and not federally. [1] Second, It is extremely hard to prove that discrimination happens while all other things are equal . Rarely all other things are also equal as there are many strongly correlated factors with race[2] that can adversely impact conviction, for example being black on average would be poorer and would more have a court appo…

1. This is a federal not state case. 2. Yes it is hard to prove discrimination controlling for all other things. Yet courts routinely do this. There is a process in place. Moreover, findings of discrimination have led to other structural changes in the judicial system, e.g., administration of the death penalty. 3. OP was talking about blinding the judge, not the jury. Sentencing, not verdict. I agree that attractiven…

I am aware it is federal, which is why i was pointing out that equal protection clause does not apply directly.

Re: Elizabeth Holmes found guilty

#508

Post by kingcharles »

avirut wrote: post #127
tptacek wrote: post #78

Time to kibitz on the likely sentence! You can get the federal sentencing guidelines here: https://www.ussc.gov/sites/default/files/pdf/guidelines-manu... They're long and mostly not relevant except for the sections pertaining to Holmes conduct. Here's the indictment: https://www.justice.gov/usao-ndca/page/file/1135066/download Holmes was found guilty of one 18 USC 1349 charge, and 3 18 USC 1343 charges; the 1343's s…

Does multiple counts served concurrently mean that the effective sentence is just the longest individual sentence? Also: I'm seeing from various websites that the maximum time-left-to-serve for minimum security (federal prison camp) is 10 years, but nothing definitive - [1] is the most in-depth but only specifies this requirement for male prisoners, whereas other requirements are clearly distinguished between male an…

> Does multiple counts served concurrently mean that the effective sentence is just the longest individual sentence?

Generally, yes.

If her sentence is high she might not classify as minimum security (prison camp) and might have to serve some years at a medium before being moved.

Remember, federal prison sentences are generally "85%" which means you can get 15% off your sentence for good behavior. Almost every prisoner will get the maximum 15%.

I didn't read the indictment. Are her offenses nonprobationable? Usually non-violent offenses are probationable for first-time offenders.

Re: Elizabeth Holmes found guilty

#509

Post by atdt »

ajmurmann wrote: post #433
metadat wrote: post #250

Earlier quoted context omitted.

Hopefully she'll get more, SV could use a good example. Otherwise it signals that wantrepeneurs can keep doing it with minimal repercussions.

"Hopefully she'll get more, SV could use a good example." I knows Theranos was headquartered in Palo Alto for part of its life, but is it really a SV company? Looking at their board I see mostly old-school business people from a construction company, Wells Fargo, and James Mattis and a former head of CDC. Only real tech person seems to be someone from NetApp. On the investor side, I don't see any of the big SV names…

Yes, absolutely. https://youtu.be/uJDc4tOU3zo?t=465

Re: Elizabeth Holmes found guilty

#510

Post by redisman »

abakker wrote: post #160
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…

I've got two beer glasses from WeWork that say "glass half full" on them. They make me laugh every single time I see them.

The metal ones? They still have those at the offices
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