Under what crimes would you like them charged? What proof do you have to support the charges?
I agree that Theranos is a terrible company and that in a just world and with perfect evidence the execs should be punished heavily but in this world I'd be most impressed if they were just fined into the poorhouse.
There is some hope though, the last paragraph reads:
"Meanwhile, the U.S. attorney’s office in San Francisco is conducting a criminal investigation that could result in indictments of both Holmes and Balwani."
But I would not hold my breath.
Now, if they had committed a real crime, such as copyright violation then that would be a different matter. But mere fraud and potentially impacting the health of consumers? Let's not make a fuss.
They took investor money and made deals with partners like Walgreens based on a product that didn't work as claimed. Either it was an outright deception and they knew they were hawking bullshit, or they sincerely believed they could eventually deliver what they were promising, but in any case they lied to those investors and partners.
But of course they will never go to jail as any of us would for this massive and blatant fraud, jail is for the little people.
The problem with investors claiming fraud is that they would have to prove that they did proper due diligence and that is where the whole thing falls down. All Holmes & Co have to do is to claim that they thought it would work and that if there was a critical flaw they only became aware of it long after the investment was made. It is very hard for investors to recover anything from start-ups that fail and it is very hard to prove fraud when it might just as well be self-delusion.
I don't doubt for a moment that it was fraud but proving that is another matter entirely.
> The problem with investors claiming fraud is that they would have to prove that they did proper due diligence and that is where the whole thing falls down.
That may be an issue for civil fraud complaints by investors, but it has no bearing on any action by the government for criminal fraud, and this subthread was about crimes for which they should be imprisoned, not torts for which they should pay damages.
> All Holmes & Co have to do is to claim that they thought it would work and that if there was a critical flaw they only became aware of it long after the investment was made.
you probably missed (it was just on radio) how Holmes & Co showcased their tech by conspicuously loading samples into the machine and then leading the audience away while rushing the samples to Siemens hardware and presenting the results from it like it was produced by their own machine. Basically investors got a slew of hands of a birthday magician for 400M (though for that kind of money i think even Houdini would rise from the dead to do the show in your backyard)
Oh wow, that's another level entirely. I was not aware of this juicy detail either (see elsewhere in this thread for another whopper). That's more than just a little shady.
Though 'fake it until you make it' gets thrown around all the time here.
Medicare and securities fraud. If employees there knew of the deception and followed orders to further it, that could be illegal. Furthermore, for employees who sold shares on the secondary market while aware of the deception, that, too, could be illegal.
At the very least, this merits close investigation.
> At the very least, this merits close investigation.
That we agree on. But proving fraud will be very hard, and the investors themselves have a lot of egg on their face in terms of lack of due diligence. In fact, they claimed at some point that they did do their due diligence and Theranos came up all roses.
FOMO is a powerful hypnotic. I've seen it in action a couple of times and it is very interesting how otherwise rational people suddenly let go of all their reserve.
They apparently (based on statements from employees involved) falsified FDA filings under direct pressure from executive management, so, good old 18 USC § 1001 [0], the catch-all crime of lying to any federal agency about anything within it's scope of concern that usually gets trotted out as a reason never to speak to federal law enforcement without the advice of counsel would seem among the more probably potential charges.
I agree that Theranos is a terrible company and that in a just world and with perfect evidence the execs should be punished heavily but in this world I'd be most impressed if they were just fined into the poorhouse.
There is some hope though, the last paragraph reads:
"Meanwhile, the U.S. attorney’s office in San Francisco is conducting a criminal investigation that could result in indictments of both Holmes and Balwani."
But I would not hold my breath.
Now, if they had committed a real crime, such as copyright violation then that would be a different matter. But mere fraud and potentially impacting the health of consumers? Let's not make a fuss.
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