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Theranos, CEO Holmes, and Former President Balwani Charged with Fraud

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Re: Theranos, CEO Holmes, and Former President Balwani Charged with Fraud

#411

Post by danso »

joering2 wrote: post #332
nathanaldensr wrote: post #2

Theranos and Holmes have agreed to settle the fraud charges levied against them. Holmes agreed to pay a $500,000 penalty, be barred from serving as an officer or director of a public company for 10 years, return the remaining 18.9 million shares that she obtained during the fraud, and relinquish her voting control of Theranos by converting her super-majority Theranos Class B Common shares to Class A Common shares. Du…

Pharma Bro was just sentenced to 7 years in jail for misrepresenting facts to investors, despite said investors did not lose any money but actually made some [1] Here Holmes not only doctored power point presentations to baloon numbers to investors, but put thousands of lives in danger (if some were lost, we will eventually find out) by providing wrong results for tests to many patients that lives relied on it, and s…

Shkreli received 7 years in prison because he was found guilty by a jury for securities fraud. What you refer to as "Here Holmes..." was were SEC civil charges. A criminal investigation was opened in mid-2016 and, as far as we all know, is still underway:

https://www.npr.org/2016/04/19/474868428/innovative-blood-te...

Re: Theranos, CEO Holmes, and Former President Balwani Charged with Fraud

#412

Post by perl4ever »

matt4077 wrote: post #119
briandear wrote: post #82

So do those of us accused of sexism for not supporting Holmes a few years ago now get vindicated? Attacking her competence and questioning the Theranos Kool-Aid was seen as sexist and unfair, but it turns out we were right — she is a criminal — or at least a civil violator of securities law.

The accusations (at least the ones I made) were never about her guilt or innocence. From what I remember, HN and similar just had dozens and dozens articles each week on this case, far more than for other, comparable cases. MtGox was around the same time, I believe. My subjective impression was also that Holmes featured far more prominently in the articles and discussions than male CEOs in other cases. Here is one co…

I think some perspective is needed. The idea that medical services you may get could be a fraud and nobody who matters really cares is much more threatening to the average person than some cryptocurrency exchange losing money or other cases of wealthy speculators being defrauded. Lots of news articles were written about the LIBOR scandal too, but even if I read them, I don't believe deep down that it affected me meaningfully.

Re: Theranos, CEO Holmes, and Former President Balwani Charged with Fraud

#413

Post by danso »

joering2 wrote: post #327
UncleEntity wrote: post #259

Earlier quoted context omitted.

> but what the regulators did in this part above is pure and simple blackmail and extortion Settling out of court is blackmail and extortion? If they thought they were innocent they could have had their day in court but instead they basically pleaded "no contest" and took their lumps.

Neither part admit or deny accusations. What the heck?? So why does DOJ even exist in the first place when such dipsy doodle can occur?

"No contest" pleas are a policy of the U.S. judicial branch, and are handled on a case-by-case basis [0]. The DOJ is an agency within the U.S. executive branch.

[0] https://en.wikipedia.org/wiki/Nolo_contendere#United_States

Re: Theranos, CEO Holmes, and Former President Balwani Charged with Fraud

#414

Post by throwawayjava »

perl4ever wrote: post #410
throwawayjava wrote: post #396

Earlier quoted context omitted.

> She committed a much larger fraud and lost people huge amounts of money. She is spending exactly zero days in prison. She is getting a $500,000 fine - which Theranos is probably paying for - and a slap in the wrist[1]. 1. Holmes is not out of the hot water yet. DOJ could still press charges and seek jail time. 2. What makes you think Theranos is paying her fine? 3. Holmes also loses 18.9 million (probably worthless…

Saying it's "obvious and rational" that we want to deter people from committing fraud is not a good defense of those involved with Theranos. I say this, not as someone who will ever invest in private companies, but as someone who occasionally gets blood tests. I think it's extremely misguided to regard fairness to criminals or defending them as victims as the goal here - the important thing is, as you seem to sort of…

> Saying it's "obvious and rational" that we want to deter people from committing fraud is not a good defense of those involved with Theranos

Oh, I didn't intend that as a defense of Theranos. I intended that as a justification for punishing Shkreli.

> the important thing is, as you seem to sort of agree, to deter bad actors and encourage good ones.

I think punishment has many societal functions, some of them more rational than others, but all legitimate in their own way.

Re: Theranos, CEO Holmes, and Former President Balwani Charged with Fraud

#415

Post by TravelTechGuy »

People have been talking for a while about the SEC moving towards some sort of regulation/legislation of ICOs. I believe the following paragraph in their announcement is telling (emphasis mine):

“Investors are entitled to nothing less than complete truth and candor from companies and their executives,” said Steven Peikin, Co-Director of the SEC’s Enforcement Division. “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 __.”

Re: Theranos, CEO Holmes, and Former President Balwani Charged with Fraud

#416

Post by mbesto »

2YwaZHXV wrote: post #402
mbesto wrote: post #125

Aside from everything else rightfully pointed out in this thread - the other interesting bit is that it's likely that their investment in commercial real estate will net a pretty massive return. I can't think of many places in the Bay that are better for a large office that can hold 100's of employees. For reference, the HQ they built in PA: https://www.google.com/maps/place/1701+Page+Mill+Rd,+Palo+Al...

They didn't actually build it. Stanford owned the land and building (and built most of it) while Theranos paid for internal improvements. Stanford also recently sold the property (maybe a year or so ago) and 1701 is available for lease now.

Oh wow, TIL. I thought they had bought it from HP.

Re: Theranos, CEO Holmes, and Former President Balwani Charged with Fraud

#417

Post by harryh »

spaceflunky wrote: post #325
mathattack wrote: post #212

Earlier quoted context omitted.

This will wipe her out, and likely kill her career. Remember, this is just the SEC. The pain they inflict is commensurate to investor pain. The government still should go after them for endangering people’s lives. There should be long jail terms for that.

>This will wipe her out Will it though? Surely Holmes still has a few million stashed away somewhere that she can live comfortably off of? This settlement isn't going to leave her destitute. Either that or I'm sure she set up some clever offshore accounting structure that has $10M stashed in the cook islands or some shit. As soon as you get some cash, I think "rich person 101" is you set up some complicated structure…

Matt Levine at Bloomberg says she never sold any shares and was paid a fairly modest salary for her role.

https://www.bloomberg.com/view/articles/2018-03-14/theranos-...

Re: Theranos, CEO Holmes, and Former President Balwani Charged with Fraud

#418

Post by cloakandswagger »

charlesdm wrote: post #384
onecooldev24 wrote: post #334

Earlier quoted context omitted.

Acting like a idiot is not ILLEGAL !!!

He acted against the law, and was an idiot.

Applying the law extra hard to people who are disliked by you/the general public really isn't in the spirit of our justice system.

What happened to Martin is an injustice, and I'm saddened and disturbed by the people who celebrate it just because it was an injustice done against a "bad guy".

Re: Theranos, CEO Holmes, and Former President Balwani Charged with Fraud

#419

Post by cloakandswagger »

pron wrote: post #78
daxorid wrote: post #14

Earlier quoted context omitted.

Alternative take: it's disgusting and offensive to the foundational concept of blind justice that punishment is more highly correlated with charisma and obsequiousness to judges than it is to actual crimes committed.

Publicly showing deference to society's rules and values is not offensive to the concept of justice.

Using the threat of force from the state to try and make someone prostrate themselves to authority is absolutely an injustice.

Re: Theranos, CEO Holmes, and Former President Balwani Charged with Fraud

#420

Post by georgeecollins »

throwawayjava wrote: post #234
SilasX wrote: post #79

Earlier quoted context omitted.

Isn't that also true without your if-clause?

The "is likely to be" part is not true in general. Changing that "likely to be" into a "may be" would make the statement true(r) without the if-clause. Also if the if-clause stated "suspected of" rather than "convicted of", then the "is likely to be" part would be true in general.

Let me show why I believe what I said. I'm no expert, and I would like it if you could clarify my understanding of why you think seizure of assets is not likely.

https://en.wikipedia.org/wiki/Civil_forfeiture_in_the_United...

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