Are Meredith Perry and uBeam next?
And Energous.
Theranos, CEO Holmes, and Former President Balwani Charged with Fraud
101–110 of 557 posts
Re: Theranos, CEO Holmes, and Former President Balwani Charged with Fraud
#102Ok, 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…
I think there is a significant difference between lying about what you can do (fraud) and simply saying you hope to accomplish something.
Right, but that doesn't mean that fraud can't happen with very early stage companies....there are plenty of b2b SaaS startups out there who are raising on non-GAAP metrics like "bookings" and who are grossly inflating both the certainty and pro forma value of these projected numbers.
Re: Theranos, CEO Holmes, and Former President Balwani Charged with Fraud
#103Ugh Finally.
More than just the financial fraud, these folks engaged in behavior that actively endangered the public. I hope this isn't the end of the government actions against them.
Her public behavior was exceptionally bizarre and almost none of what's been revealed comes as any real surprise. For timeline purposes:
Dec 24, 2017 - They get $100m lifeline investment https://www.wsj.com/articles/blood-testing-firm-theranos-get...
June 21, 2017 - Walgreens settlement https://www.wsj.com/articles/theranos-walgreens-reach-deal-t...
May 30, 2017 - Crisis on the Board https://www.wsj.com/articles/court-documents-shed-light-on-t...
April 21, 2017 - Caught using outside lab gear to fake tests https://www.wsj.com/articles/theranos-secretly-bought-outsid...
April 5, 2017 - Holmes found to owe $25m to her own startup https://news.ycombinator.com/item?id=14047457
Jan 19, 2017 - Closes last lab after failing inspection https://news.ycombinator.com/item?id=13433840
Jan 17, 2017 - second lab fails inspection https://www.wsj.com/articles/second-theranos-lab-failed-u-s-...
Jan 6, 2017 - Lays off 41% of workforce https://news.ycombinator.com/item?id=13338996
Nov 17, 2016 - Whistleblower comes out https://www.kqed.org/futureofyou/283681/theranos-whistleblow...
July 8, 2016 - Banned from operating a lab for 2 years https://news.ycombinator.com/item?id=12053721
Jan 27, 2016 - Letter from the feds https://news.ycombinator.com/item?id=10983747
Dec 20, 2015 - Some skepticism https://news.ycombinator.com/item?id=10765562
Oct 16, 2015 - Struggles with tech https://www.wsj.com/articles/theranos-has-struggled-with-blo...
Re: Theranos, CEO Holmes, and Former President Balwani Charged with Fraud
#104Earlier quoted context omitted.
I kind of agree [1], but I don't think that's why there's a difference between the cases. First of all, the Theranos people haven't yet been brought up on criminal charges, but it's still possible they could be, no? Secondly, I think there were lots of material differences between the two cases that caused them to be prosecuted differently. You can't just lump every instance of fraud as the same thing. [1] The reason…
On showing remorse: it's a bit ridiculous to think of this, since showing remorse does not mean you actually feel remorse. But it might mean you are intelligent enough to realise you need to show remorse to get off the hook.
That's exactly what it boils down to. The justice system makes you get on your knees.
Re: Theranos, CEO Holmes, and Former President Balwani Charged with Fraud
#105Earlier quoted context omitted.
Lets not pretend that everyone isn't just following the leaders here with grandiose messaging. Major tech corporations have done this as much as small startups. IBM's Watson comes immediately to mind. The difference is whether or not you can come through with some percentage of your promises. The ones who can eek out some kind of repeatable traction long enough to exit are successes, the ones who never get to scale a…
No, Theranos outright committed fraud. They did things like used test results from some other kind of blood test to "prove" their test worked. That isn't "We are on shaky ground with new, unproven tech." That's "We know it doesn't work. We are comfortable lying about it because money."
Agreed, but that's not what Chuck was talking about which is the "fake it till you make it" attitude/messaging.
Re: Theranos, CEO Holmes, and Former President Balwani Charged with Fraud
#106Take a TV from a truck that's left open behind a warehouse; get months if not years in jail. Deliberately commit fraud for years and steal millions and millions of dollars; slap on the wrist. Our system is so ridiculous.
The SEC is a civil agency and can not jail anyone for anything, they can only levy penalties. Justice has to take over the case for an offender to go to prison.
Is there any kind of requirement (or general process) that says that Justice typically defers until the SEC has issues findings and sanctions before beginning (or stepping up) criminal proceedings?
Re: Theranos, CEO Holmes, and Former President Balwani Charged with Fraud
#107Earlier quoted context omitted.
SEC doesn't put people in prison, it can refer to Justice Department for prosecution. Whether it does or not, depends on the circumstances of the case. They prefer quick resolution rather than years of litigation.
Many people are in jail today because they can't post bail. You can discourage ever facing incarceration by being able to afford a good legal defense. You can be forced to accept incarceration without conviction because you are poor.
I doubt Holmes can afford much of anything anymore.
Re: Theranos, CEO Holmes, and Former President Balwani Charged with Fraud
#108call me back when the ex board members get hit for this..
IMHO the fraud wasn't the investors getting fleeced, it was the US public through obamacare payments made for pharmacy blood screening..
and given the players this will never, ever, ever see the light of day..
for now, it sounds like they are taking the fall to cover the higher ups to me..
https://en.wikipedia.org/wiki/Theranos
Since its incorporation in 2003, Holmes has been the company's chief executive officer. She recruited Channing Robertson, a chemical-engineering professor at Stanford, to be a technical advisor and the company's first board member during its early years. Sunny Balwani, a software engineer Holmes had met during high school, joined the company as its president and chief operating officer in 2009.[54] In July 2011, Holmes was introduced to former Secretary of State George Shultz, who joined the Theranos board of directors that same month.[55] Over the next three years, Shultz helped to introduce almost all the outside directors on the "all-star board," which included William Perry (former Secretary of Defense), Henry Kissinger (former Secretary of State), Sam Nunn (former U.S. Senator), Bill Frist (former U.S. Senator and heart-transplant surgeon), Gary Roughead (Admiral, USN, retired), James Mattis (General, USMC), Richard Kovacevich (former Wells Fargo Chairman and CEO) and Riley Bechtel (chairman of the board and former CEO at Bechtel Group).[55][56][57] The board was criticized for consisting "mainly of directors with diplomatic or military backgrounds."[11]
As of May 2016, the Theranos board of directors were:[64]
Elizabeth Holmes, Founder and CEO
Riley Bechtel, former Bechtel Group CEO
David Boies, a founder and the chairman of Boies Schiller & Flexner
William Foege, former director U.S. Centers for Disease Control and Prevention
Richard Kovacevich, former Wells Fargo CEO and chairman
James Mattis, retired USMC General
Fabrizio Bonanni, former executive vice president of AmgenRe: Theranos, CEO Holmes, and Former President Balwani Charged with Fraud
#109Earlier quoted context omitted.
Do we know if she was rich before? Maybe she was able to cash out a lot of her shares during some of the financing rounds, but she also could have just been "rich" on paper by owning many Theranos shares. If she was rich by virtue of holding Theranos shares, her wealth has decreased a ton in the last couple years since the value of the company has surely plummeted.
The SEC document says that she never sold any of her shares, and says > Holmes was paid a salary of approximately $200,000 to $390,000 per year between 2013 and 2015
Hey, I've no idea how to PM you, but you flagged my submission about the SEC charging another company... Equifax. This story is about Theranos.
> https://news.ycombinator.com/item?id=16586011
> "on the front page, please check for duplicates before submitting"
Re: Theranos, CEO Holmes, and Former President Balwani Charged with Fraud
#110Ok, 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…
>For all those entrepreneurs are trying to "fake it until you make it" be aware that the SEC considers your strategy both fraudulent and they feel they have the jurisdiction to prosecute you. Holmes was, in many ways, embodying that HN mentality, acting on the basis: - that an entire industry has been doing it wrong - that it can be fixed by a low-bureaucracy, Angel-funded startup - that once you have enough success…
good thing you told us it was heavily upvoted before, now i know to upvote it this time too