A CEO being held accountable?
What IS the world coming to?
Former Theranos CEO Elizabeth Holmes sentenced to 11 years in prison
A federal judge on Friday sentenced former Theranos CEO Elizabeth Holmes to 11.25 years in prison and three years of supervised release for defrauding investors in the failed blood testing company. Holmes, facing 11 charges, was found guilty in January 2022 of conspiracy to commit wire fraud and three counts of wire fraud, and …
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Monday 21st November 2022 12:28 GMT Tom 7
Re: A CEO being held accountable?
Actually he did exist - its just he did nothing attributed to him. There was a Robert Hoode from south Cumbria who was probably executed in Lancaster 1292 (records from that year suspiciously missing - Nottingham visitor?) All of it was part of Yorkshire at the time and they do like to big themselves up still.
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Saturday 19th November 2022 10:31 GMT Fred Flintstone
Re: A CEO being held accountable?
Alas, it appears the quote was made up by a journalist.
That doesn't take away the clear logic of it, though.
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Monday 21st November 2022 10:15 GMT iron
Re: A CEO being held accountable?
And yet she was only found guilty on 4/11 charges whiole the man involved was convicted on all 12 depite the fact that the company, technology and product were all her idea long before she mwt him. The entire scam was started and perpetuated by the pretty white blonde but the brown man is taking most of the rap.
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Monday 21st November 2022 17:17 GMT martinusher
Re: A CEO being held accountable?
Martha Stewart got busted for "Lying to the FBI" because they couldn't nail her for insider trading or anything else.
Typically if the SEC catches you doing insider trading they'll take your profit off you quite likely fine you as well. I don't know to this day what the FBI were after.
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Monday 21st November 2022 19:00 GMT Michael Wojcik
Re: A CEO being held accountable?
Kevin White pointed out (years ago, on Popehat) that this is quite common. Do not answer questions from the FBI, or other Federal officers. Speak to them only through a lawyer. Lying to a Federal officer is a felony, and they're often quite good at leading you down the garden path into making some sort of false statement.
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Monday 21st November 2022 11:23 GMT JClouseau
Re: A CEO being held accountable?
That one too. For those who haven't yet, try to watch "DOWNFALL" on Notflix. I haven't lost anybody in those crashes but felt gutted about how this mess went (and eventually vanished without much happening to the aholes in charge).
The parallel is interesting insofar no-one died directly because of Theranos (or possibly a few desperate and broke investors).
Looks like the satisfaction of living investors is more important than some justice for the families of 346 dead people.
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Sunday 20th November 2022 08:33 GMT Jonathon Green
Re: How long before she ...
Were we talking about actual human beings you might have a point, however this is an alien from the planet C-Suite and ascribing human emotions and/or motivations to them constitutes a category error.
As a wise woman once said “ I say we take off and nuke the entire site from orbit. It's the only way to be sure.”
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Sunday 20th November 2022 03:02 GMT Code For Broke
Re: Because she had already suffered by being stigmatized.
Downvoting the "suffer the consequences" commenter because I sense nothing but schadenfreude in your words, and, have you not noticed the entire theme of this forum? The evil business people almost never "suffer the consequences" (unless they are women, minorities, etc.).
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Sunday 20th November 2022 19:31 GMT Anonymous Coward
Re: Because she had already suffered by being stigmatized.
almost never "suffer the consequences" (unless they are women
She seems to have been convicted of significantly fewer changes than Sunny in this case, with only one clear reason for that.
It will be interesting to see how long he gets inside. Anyone want to take a wager on it?
(Where I live, women are charged with fewer crimes, are charged with lesser crimes, are convicted less, and when convicted are given lesser sentences. The report on this, didn't even warrant the government pretending it should do try do something about it. After all, 51% of the population is happy with that status quo, so why would you?)
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Saturday 19th November 2022 10:11 GMT chivo243
Re: already suffered by being stigmatized
and so stigmatised - I have to think the law talking dude was saying that she had been stigmatised within her circle, not the larger society, possibly drawing on the fact that the judge may actually be in that same circle, power follows strange paths.
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Sunday 20th November 2022 02:08 GMT Nick Ryan
Re: already suffered by being stigmatized
If she was innocent and stigmatised then that's a fair argument. However, as she has been found not innocent then the stigmatism (which now sounds rather ophthalmic) was rather justified and therefore people doing the stigmatising should be applauded.
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Saturday 19th November 2022 07:45 GMT Twanky
Some...
Some of those who lost money investing in Theranos are extremely wealthy,
Yeah - and some were not. It does/should not affect the verdict of whether it was fraud or not.
After being found guilty the level of harm done should affect the length of the sentence and from the article it seems the judge has opted for minimum.
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Saturday 19th November 2022 15:46 GMT werdsmith
Re: For UK residents
In the UK the entire sentence is served, but some of it can be (and usually is) on license. A 15 year sentence is not the same as 15 years locked up in prison. A sentence can include a minimum time to be spent inside, but the length of the sentence includes time in custody and time on licence. On licence means a person can be returned to prison for any offence. Hence a life sentence. When a person is sentenced to life, they remain on license until they die, but not necessarily behind bars.
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Saturday 19th November 2022 17:27 GMT mark l 2
Re: For UK residents
The UK automatic release on license at the half way point is only for 'regular' offenses, as if a offender is classed as dangerous they serve at least 2/3 of the sentence in prison and have to go in front of a parole board who decide when they can be released on license.
The US you can get early release from prison for 'good behavior', which is calculated as 54 days off the sentence accrued ever 12 months.but they can forfeit the right to the days off the sentence for breaking the prison rules or committing crimes while locked up. Where in the UK you can be an absolute shit while locked up and still get released at the half way point if you are not considered dangerous by the courts.
I guess though that means some people who were dangerous and committed horrible crimes in the states might get let out early just because they managed to keep their nose clean while in prison?
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Saturday 19th November 2022 23:43 GMT david 12
Re: For UK residents
some people who were dangerous and committed horrible crimes in the states might get let out early
Generally, "Early Release" is subject to the random decisions of random prison guards and management. You can be bad, but prisoners have very little control of what happens to them and how 'clean' they can be.
And prisons are privately operated, and the operator has no interest in early release.
Historically, it was used in the opposite way: people who were dangerous and committed horrible crimes were kept in for maximum, regardless of court minimum. So, a person who had pled guilty to a string of 'simple burglaries' -- on a string of young women, living alone -- might serve 15 years of a 3-15 year sentence. Prison authorities were, and are, a law unto themselves.
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Saturday 19th November 2022 14:20 GMT heyrick
Re: "His sentencing is scheduled for December 7, 2022"
Not been following the random spats between tech companies? A verdict is made. Then it's appealed. Then that is appealed. Then that might be appealed. Generally it stops when: the Supremes make a ruling, the weaker party can't afford lawyers any more, or the more powerful party gets the result they want and make it clear that they'll appeal any appeal thus dissuading continuing. It's a circus designed to employ lawyers more than serve justice.
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Saturday 19th November 2022 10:30 GMT Ashto5
She got off lightly
I have to say I believe that she got off lightly.
These massive frauds have massive consequences for smaller people.
Why does the tech sector still think a dropout from a massively successful institution, is some sort of success story?
There are a lot more CEO’s that need to be sent to jail.
This sort of sentence just sends the signal
Go for it, even if caught you will still be stinking rich when you get out.
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Monday 21st November 2022 04:54 GMT MachDiamond
Re: She got off lightly
"There are a lot more CEO’s that need to be sent to jail."
I'm a big advocate of C-level execs having much more liability for actions of the company since they can be extremely well compensated. It would likely cut down on them cutting corners when it comes to product liability and warehousing PII.
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Sunday 20th November 2022 02:51 GMT Kevin McMurtrie
Re: Regrets
She might be the classic psycho CEO stereotype and not understand any of this. It's a mental defect that some people interpret as genius leadership.
Theranos overlapped with Magic Leap and all the companies claiming to almost have fully self-driving cars. Lots of hype with no verification and no analytical thinking of what's possible. Investors should have seen a bad pattern coming but, instead, reached out with fists of money. Now we're in another dot-com bubble.
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Saturday 19th November 2022 12:33 GMT Peter D
Those eyes
It's so strange to see her being sentenced to that amount of time. With her tender lilting voice and kind eyes she exuded such warmth, compassion and love. Witnessing the downfall of such a beautiful soul who only ever wanted to give succour to the sick is a bitter pill to swallow.
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Saturday 19th November 2022 14:26 GMT heyrick
Re: Those eyes
Don't want to come across as (too much of) a cynical bastard, but having worked as a Care Assistant in nursing homes, you'd be horrified at how many "really lovely nurses" get off on abusing people too gaga to fight back or even complain. That's not to say there aren't lovely nurses around, there are (and most of them I've come across were Irish), but some people who seemed excellent had real darkness inside them.
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Saturday 19th November 2022 17:16 GMT Sceptic Tank
Re: Those eyes
You cannot infer personality from the way someone looks. Some of the most beautiful women I've met were also the ones who had the most awesome personalities: kind, friendly, respectful. But then, because of assumptions like the one above, people would behave most miserably towards them without even bothering to get to know them. I always kind-of assumed this was why they developed such nice personalities: you observe how other people treat you and you don't want to portray that same kind of awful personality towards other people because of how bad it looks. But with that said, I wouldn't want to get to know EH; she's demonstrated herself as being a self centered and self serving person. You really cannot tell from just looking at someone what their personality is like.
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Saturday 19th November 2022 19:27 GMT Abbas
The rich investors deserved it.
As someone working in scientific research, Theranos claims were so crazy that immediately put them into the category of "warning: big bullshit approaching". Why didn't the consiglieri of rich people do their work and ask for an specialist insight of the product?
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Saturday 19th November 2022 19:41 GMT doublelayer
Re: The rich investors deserved it.
A lot of them did. Every time she went to an investor who knew about the industry, they rejected her immediately. That's why she had to carefully find people who wouldn't ask too many questions and who could be fooled by faked financial and medical documents. Even those relatively stupid people asked for such things, but they assumed that when reports from companies or agencies well-respected for financial or medical expertise said the company was good that those reports were real. They were forgeries. Don't assume the investors were so stupid that they didn't look for any proof, as the effort to defraud them was real and serious. They didn't properly investigate and will deservedly lose money from it, but they don't deserve much of the blame.
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Sunday 20th November 2022 17:12 GMT Yet Another Anonymous coward
Re: The rich investors deserved it.
Also you factor that into the investment returns:
They claim to detect these 20 diseases in a single 1ml sample for $1. OK that's ridiculous, but if they can do 10 tests on a 20ml sample for $10 then we are still 10x up on the competition.
Problem is when instead of switching to a realistic product they just keep hyping the impossible one.
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Monday 21st November 2022 05:18 GMT MachDiamond
Re: The rich investors deserved it.
"As someone working in scientific research, Theranos claims were so crazy that immediately put them into the category of "warning: big bullshit approaching". Why didn't the consiglieri of rich people do their work and ask for an specialist insight of the product?"
Fear of missing out likely. Think of how many millions they could have lost of they waited for some due diligence to be performed while the price of the stock kept rising.
As an enginerd, I can spot the BS in lots of thing having to do with engineering and the state of the art. If I were contemplating a big investment in something like Theranos, I'd talk to some experts in the field first. Even if I needed to pay them a consulting fee, it would be better than losing my investment. At least I could be reasonably sure the consulting money went to somebody that gave me good value in return.
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Monday 21st November 2022 11:28 GMT Nick Ryan
Re: The rich investors deserved it.
...and stuff like this wouldn't take long to get a well judged response on from somebody who knew what they were talking about. These experts, now decried by the political press as being naysayers in all forms, are experts for a reason and know their subject. Not all will agree but with blatant nonsense like Theranos' claims any independent with any half reasonable level of expertise would have come down on the "this is bullshit" side pretty much instantly. There are occasions when something may warrant a little more investigation, but that's also a reasonable response - as in "it's probably bullshit but there is a chance that they could be onto something, checking in more detail is recommended".
Physics and chemistry don't bend to charlatan's wills.
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Monday 21st November 2022 17:35 GMT Anonymous Coward
Re: The rich investors deserved it.
> As someone working in scientific research, Theranos claims were so crazy that immediately put them into the category of "warning: big bullshit approaching".
Two reasons: Investigations take time, and they want to be first in line for those lovely, big fat rewards. Second, an investigation might reveal that there is bullshit approaching and they might be forced to reconsider the investment. It's best not to ask the question if you might not like the answer.
If I was going to invest in something like that, I'd at least insist on some sack-time with Ms. Holmes for my trouble.
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Sunday 20th November 2022 11:37 GMT Anonymous Coward
So when's Tim Drapers day in court?
None of the bio-tech VC's would touch Theranos even in the seed stage. It was that obvious it was a total fraud from the get go. But Draper, Fisher, Jurvertson stepped in with seed money and got the ball rolling. And cashed out when the Bigger Fools came along.
So when is Tim Draper going to be charged and hauled in front of a court? Without Tim Draper there would have been no Theranos. He made it happen. It would have remained the bizarre ramblings of a very creepy (even for Stanford) narcissistic fantasist. There are some real nutcases wandering around The Farm. And those people who died or suffered serious health problems due to this massive fraud might still be alive today. Or have been treated earlier.
Its not like Draper does not have form with this kind of stuff. VC financed scam companies. Going back decades. But they usually dont kill people or do serous harm to peoples health. So lets put the real guilty people on trial. The facilitators and prime movers.
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Sunday 20th November 2022 15:09 GMT Muscleguy
It seems to me she was a true believer in the technology. There are stories of her berating lab workers to work harder to make the technology work. The fraud was playing for time until the technology started to work which she seemed to believe it would if the scientists just worked harder.
I don’t see much of the principle of caveat emptor here. The investors need to emply some scientific advisors who know their onions before laving large amounts of moolah on startups like this. The basic idea is not impossible. I just think the sensitivity of the detection tech is not there yet.
If you have had a blood test lately you will see the size of the tubes filled. That is not just a finger drop of blood.
I recently had a lumbar puncture, a needle was inserted under the membranes to sample the CSF. I’m awaiting news of the results 6 weeks later. Some things still take time.
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Sunday 20th November 2022 16:33 GMT doublelayer
Believer in the technology? No, she was a manager who thought that shouting and forcing people to work would automatically fix any technical or scientific issues. In addition, she was knowingly faking everything that didn't work so she never had to consider whether her idea was possible or feasible given how many smart people couldn't get it working.
Is the idea possible? Sure, eventually. Just as television would have been possible in 1800. Yet if I was running a company in 1800 and insisted that television could be invented if I shouted at engineers enough, none of the necessary technologies would have come to pass. In addition to being happy to commit fraud and to give people inaccurate test results, she was very bad at her job of managing people or or figuring out what advances were feasible and using that knowledge to obtain a real result.
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Monday 21st November 2022 05:35 GMT MachDiamond
"No, she was a manager who thought that shouting and forcing people to work would automatically fix any technical or scientific issues."
Once again here another example that you can't railroad until it's time to railroad.
I love the James Burke Connections series and there has been a few more along the same lines that show how we got to where we are today in terms of technology, society, etc. One thing that should be very apparent is that huge leaps in technology are excruciatingly rare. Even then, it's often incremental improvements that happen rapidly over time rather than one big step.
Looking back, I wish my Uni course requirements included some classes in engineering history. It's been independent study when I can find a book or video from somebody that has done the research. A very good lesson at present is the story of Uranium. It was thought to be very rare and in the 1940's the US was buying up as much as they could worldwide while the Manhattan project was still secret. Once the cat was out of the bag and a big demand was in place, it was found all over. I see much the same thing happening with Li and Co. I'm seeing more and more stories about deposits now that there is a big market for both. While Cobalt has a tainted past due to where easy to get surface deposits exist, the requirement for the metal in quantity will drive out the family and individual miners since they can't produce in the quantities that manufacturers want to purchase in. The same goes for what the West would call "underage" labor.
Anybody claiming that they can fully automate an automobile plant needs to be screened for insanity. If it could be done, the big players would have cracked that nut. They do continuously make strides towards complete automation, but it will be some time if it can ever be acheived or it's deemed to be worthwile. As one of the biggest and most competitive industries on the planet, it can be a good place to draw parallels from.
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Sunday 20th November 2022 18:11 GMT Anonymous Coward
And the patients?
This was strictly a fraud trial and I am not conversant enough with US jurisprudence to know who would prosecute her for the damage done to patients (not to mention threatening doctors). She deliberately harmed -- or chose to ignore the harm -- caused to patients by the bogus test results. That deserves a response!
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Monday 21st November 2022 17:39 GMT doublelayer
Re: And the patients?
They tried. Some of the charges concerned fraud to patients, essentially selling them useless or harmful tests. Unfortunately, the jury found her not guilty on those charges (her COO did get found guilty on those). I have no good explanation of why they did that, but it now means the chances of using the same charges against her are almost zero (you cannot be charged with the same thing again unless serious flaws were found in the proceedings). There aren't a lot of laws that can be used to charge her criminally, but she could still be sued by patients. I do not know enough to know if there's any chance of that working.
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Monday 21st November 2022 04:27 GMT James Anderson
Re: And the bum tests?
It’s a sign of just how sick the US has become.
She and or her company was not prosecuted for submitting falsified results to the FDA.
She and or her company was was not prosecuted for defrauding customers by charging for non existent technology.
She and her company was not prosecuted for medical negligence that endangered patients lives, hell no one has even bothered investigate.
The only thing that mattered was she exposed how dumb the financial industry and its cheerleaders are (cover of Time magazine! ) and is being punished accordingly. If she had mentioned snake oil in her financial reports she would still be a free woman.
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Monday 21st November 2022 17:42 GMT doublelayer
Re: And the bum tests?
"She and or her company was was not prosecuted for defrauding customers by charging for non existent technology."
Actually, she was charged with this one. Her COO was too and found guilty. She was found not guilty for reasons I don't understand or support. This was the charge they used to attempt to punish her for harm to patients, and you can also bet that the harm to patients was one of the reasons they wanted to pursue the other charges this far; she appears to have enough barriers to being charged with the direct harm, but she's still going to prison because they pursued charges that worked.
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Monday 21st November 2022 00:09 GMT aerogems
Good
It's longer than I expected her to get. Still not long enough IMO, given people's health and lives were put at risk and we may never know how many people died as a direct result of this fraud, but it is at least something. Given she's a reasonably attractive, wealthy, and pregnant white woman, I was expecting her to basically get a slap on the wrist of a couple of months that she could serve on weekends in some minimum security prison and then maybe a year or two of probation. Her little sprog will be in middle school around the time she gets out of prison. I'm sure the other children at some elite prep school will be ever so kind to them.
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Monday 21st November 2022 05:49 GMT MachDiamond
Were people at risk?
From what I can recall, they were still doing blood tests the old fashioned way and making claims about their new process to raise investment. It's wasn't the fake machinery/technology that was being used to perform the tests. It's like the scam where somebody fills what looks like their gas tank with water, adds a couple of pills and drives off making it appear they have come up with a way to run a car on water. In reality, the car was fitted with another tank that was filled with good ol' petrol. They come back in a day or so and do the same thing but sell the yokel at the gas station a bottle of the pills at a discount price who then goes on to ruin their car's fuel system.
I would think that if the company was providing false test results and people were injured or killed, Elizabeth would not have been able to make bail and a whole bunch of other people would also be in the dock for murder.
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Monday 21st November 2022 08:05 GMT Southernboy
Re: Were people at risk?
Well, from the book or podcast on it (can't remember which). There's at least one patient who suffered as a result.
A lady who'd suffered at least 2 miscarriages. Theranos result showed she was going to lose her current baby. Doctor flummoxed by results, had reliable reputable test done, all OK.
Just think of the distress that mother went through.
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Monday 21st November 2022 17:48 GMT doublelayer
Re: Were people at risk?
Not exactly. They did use existing machines rather than their own, but they weren't conducting the normal tests. Their claim was that they could test on a lot less blood on their machine. In order to hide the fact that they were using someone else's machine, they still collected less blood for use. The reason the competitors' machines use more blood is that you get unreliable results if you collect a lot less and pad the sample with other substances to get it up to volume. They were using reliable machines in a way that produced unreliable results anyway.
As for the results of this, it's hard to know. If the machines reported false positives, the patients likely sought medical attention and got corrected data from real machines. A terrifying and expensive situation, but not a lethal one. The lethal option is that someone used the test and got a false negative thus avoiding necessary treatment, but it would be hard to prove that because they would either have died without getting treatment or looked like someone who didn't bother testing until it was too late. They probably exist, but they're less likely to know it.
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Monday 21st November 2022 13:59 GMT Robert Grant
> Holmes in an emotional speech told the court that she regretted her failings and having failed the employees, investors, and patients she tried to serve.
This is not true - should it be in quotation marks? She didn't fail people she tried to serve; she deliberately claimed for millions of dollars and crazy amounts of press that something that is currently impossible was in the process of being fully industrialised. That's not failing people you tried to serve.
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Monday 21st November 2022 17:30 GMT jollyboyspecial
I always thought there were two possibilities here:
The charitable one: That she had a what if moment. What if we could come up with a technology that would allow us to diagnose a huge number of diseases from a tiny sample of blood. Now there are plenty of doctors and scientists who could tell you a whole number of reasons why this would be hard, but being charitable maybe she thought it might be possible. Maybe it came from a misunderstanding of how this shit actually works, who knows? But the pressed ahead anyway. Until the investors money ran out and the project was no further forward. And then naively she decided to get more investment because surely the quantum leap was right around the corner. Repeat until the investors have had enough and they call the cops.
The uncharitable one: She's a con artist.
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Monday 21st November 2022 17:30 GMT martinusher
Comapred to crypto...
...Theranos was small beer. The company was just guilty of wishful thinking (and overenthusiastic marketing). If that truly is a crime then most of SV would be in the clink.
While crypto itself is mostly uninteresting/harmless it does have the characteristic of an unregulated security. In the creative hands of the financial engineers it turns into a monster that can fleece more investors for more money and at a speed that a Theranos could only dream of. The problem isn't the asset, though -- its uusally straightforward enough to tell whether something has intrinsic value or not but once its been sliced, diced, securitzed, sold and resold the people who end up with the stuff haven't a clue what they've bought. Its like subprime without the inconvenience of having to mess with tangible assets like housing.
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Wednesday 23rd November 2022 08:23 GMT amanfromMars 1
Con artists, in the Holmes and Sam Bankman-Fried mode, never know when to stop ....
The evidence for the prosecution, m’lud ...... https://cryptome.org/2022/11/holmes-1655.pdf
And Holmes' Preliminary Statement/Mea Culpa is not surprisingly similar to the squawking all are hearing from Sam Bankman-Fried of very recent FTX and Alameda collapse fame/infamy ...
"I didn’t mean for any of this to happen, and I would give anything to be able to go back and do things over again,” .... SBF Issues Another Rambling Apology And "Description Of What Happened", Comes Off As Disturbed Sociopath
Unfortunately such rampant cynical pre-meditated criminal abuse is not confined to, and professionally argued to be acceptable, only in America.
Biting the hand that feeds IT
