This woman is really amazing!

[Mephistopheles]

How did she endanger people's health? It sounds like she was using competitors tests for the vast majority of her company's results.

 

 

Theranos Voids Two Years of Edison Blood-Test Results

 

The company has told the Centers for Medicare and Medicaid Services that it has issued tens of thousands of corrected blood-test reports to doctors and patients, voiding some results and revising others, according to the person familiar with the matter.

 

http://www.wsj.com/articles/theranos-voids-two-years-of-edison-blood-test-results-1463616976

[randomep]

How did she endanger people's health? It sounds like she was using competitors tests for the vast majority of her company's results.

 

 

Theranos Voids Two Years of Edison Blood-Test Results

 

The company has told the Centers for Medicare and Medicaid Services that it has issued tens of thousands of corrected blood-test reports to doctors and patients, voiding some results and revising others, according to the person familiar with the matter.

 

http://www.wsj.com/articles/theranos-voids-two-years-of-edison-blood-test-results-1463616976

 

Damn, I got 2 years of insulin shots, and now I found out I don't have diabetes!

 

:)

 

[UNF2007]

I have been following this story with interest for some time. I think the lesson I have drawn from it is that you really have to do your own work on an idea. At some point the argument was made that if venture firms are putting money into this idea then by extension they have sufficiently vetted it with the appropriate due diligence (they obviously didn't). That having a board of big name people must mean ipso facto that they have spent the time to evaluate the company, it's research and product and found that it was valid (they didn't). This is in retrospect one of Munger's 25 causes of human misjudgment , #10 Bias by influence by authority, probably some others as well.

[arcube]

+1. Well judged.

 

I have been following this story with interest for some time. I think the lesson I have drawn from it is that you really have to do your own work on an idea. At some point the argument was made that if venture firms are putting money into this idea then by extension they have sufficiently vetted it with the appropriate due diligence (they obviously didn't). That having a board of big name people must mean ipso facto that they have spent the time to evaluate the company, it's research and product and found that it was valid (they didn't). This is in retrospect one of Munger's 25 causes of human misjudgment , #10 Bias by influence by authority, probably some others as well.

[LongHaul]

I have been following this story with interest for some time. I think the lesson I have drawn from it is that you really have to do your own work on an idea. At some point the argument was made that if venture firms are putting money into this idea then by extension they have sufficiently vetted it with the appropriate due diligence (they obviously didn't). That having a board of big name people must mean ipso facto that they have spent the time to evaluate the company, it's research and product and found that it was valid (they didn't). This is in retrospect one of Munger's 25 causes of human misjudgment , #10 Bias by influence by authority, probably some others as well.

 

 

+1: 

I would add Social proof and Group failure as well. 

 

Never trust anyone over 1 years of age on Wall street!!!!

[dcollon]

From the WSJ

 

Theranos Inc. said it will shut down its blood-testing facilities and shrink its workforce by more than 40%.

Theranos_Retreats_From_Blood_Tests_-_WSJ.pdf

[tede02]

http://www.wsj.com/articles/major-investor-sues-theranos-1476139613

 

I chuckle about this whole story every time I read about it.  She really played the part well, the Steve Jobs turtle neck and all. 

 

People buy stories (I'm definately guilty of it), and she told one hell of a good one. 

[Travis Wiedower]

What a fascinating story--will probably be a good book/movie in a few years depending how it turns out. My big takeaway from following this since the beginning is to not put so much trust in reputable news sources. It's easy to assume they've done their homework and it turns out very few of them had (myself included, I believed all the great stuff I heard about her). Theranos gets added to a few other blowups (Ocwen, Valeant) that have taught me a lot the past few years.

[tng]

What a fascinating story--will probably be a good book/movie in a few years depending how it turns out. My big takeaway from following this since the beginning is to not put so much trust in reputable news sources. It's easy to assume they've done their homework and it turns out very few of them had (myself included, I believed all the great stuff I heard about her). Theranos gets added to a few other blowups (Ocwen, Valeant) that have taught me a lot the past few years.

 

I think there is already a movie in the works starring Jennifer Lawerence

[Jurgis]

What a fascinating story--will probably be a good book/movie in a few years depending how it turns out. My big takeaway from following this since the beginning is to not put so much trust in reputable news sources. It's easy to assume they've done their homework and it turns out very few of them had (myself included, I believed all the great stuff I heard about her). Theranos gets added to a few other blowups (Ocwen, Valeant) that have taught me a lot the past few years.

 

I think there is already a movie in the works starring Jennifer Lawerence

 

In the movie Elizabeth Holmes will probably land a plane on Hudson while being attacked by snakes and FDA officials.

[randomep]

What a fascinating story--will probably be a good book/movie in a few years depending how it turns out. My big takeaway from following this since the beginning is to not put so much trust in reputable news sources. It's easy to assume they've done their homework and it turns out very few of them had (myself included, I believed all the great stuff I heard about her). Theranos gets added to a few other blowups (Ocwen, Valeant) that have taught me a lot the past few years.

 

 

 

That 's a very good point. Well two good points. One is to learn from one's own errors in judgement. And the other is about news sources. 

 

I think writers work backwards with a thesis and find supporting data to confirm their thesis. Which then makes a great story.  From the top of my head I recall reading some pretty hilarious articles when looking in hindsight.

 

 

1. Stan O'neal of Merril Lynch, I recall a flattering front page Fortune article about his great leadership.

 

2. An article about what great innovations Americans brought to the mortgage market. This was their explanation

for why the American economy and stockmarket was doing so much better than the rest of the world in the mid 2000's.

 

3. A article about the Nortel CEO as the management of the year in a Canadian business magazine in 1999/2000.  A

few years later.....  nortel went kaputz

 

 

My point is not that the article writers are idiots, but that they have no basis to judge the people they are writing about.  Time will

tell and the authors can't judge just like we can't judge.

 

 

[rkbabang]

"Fraud is not a trade secret"

 

WSJ: Theranos Whistleblower Shook the Company—And His Family

[rukawa]

"Fraud is not a trade secret"

 

WSJ: Theranos Whistleblower Shook the Company—And His Family

 

From the article

In a conversation in his parents’ kitchen, they pleaded with him to agree to whatever Theranos wanted, he says. Even though his heart sank when they discussed selling their house to cover the costs of defending him against a potential Theranos lawsuit, Mr. Shultz didn’t make a deal with the company.

 

His parents said in a statement: “Tyler has acted exactly like the man we raised him to be, and we are extraordinarily proud of him.

 

His parents pressured him to do the wrong thing and then took credit when he did the right thing. Hilarious.

[rkbabang]

"Fraud is not a trade secret"

 

WSJ: Theranos Whistleblower Shook the Company—And His Family

 

From the article

In a conversation in his parents’ kitchen, they pleaded with him to agree to whatever Theranos wanted, he says. Even though his heart sank when they discussed selling their house to cover the costs of defending him against a potential Theranos lawsuit, Mr. Shultz didn’t make a deal with the company.

 

His parents said in a statement: “Tyler has acted exactly like the man we raised him to be, and we are extraordinarily proud of him.

 

His parents pressured him to do the wrong thing and then took credit when he did the right thing. Hilarious.

 

It kind of makes some sense.

I hope I raised my son to be the type of man that would do the right thing even if it was my wife and I pressuring him to do the wrong thing.

They pleaded with him to do what they said because they were worried about what would happen to him if he didn't, not because they thought it was the right thing to do.  They are proud of him in retrospect.

 

[randomep]

 

 

Somebody from this fiasco should be featured in the 3rd edition of "Profiles in Courage" The book that JFK claims to have written.

 

 

[benhacker]

If I ran a company with employees in his field, i would offer the kid a job.  Pretty mentally tough to do what he did.

[tede02]

The story behind the story.  John Carreyrou in his own words:

 

https://charlierose.com/videos/29521

[Liberty]

It took a while, but the other shoe dropped:

 

https://www.cnbc.com/2018/03/14/theranos-ceo-holmes-and-former-president-balwani-charged-with-massive-fraud.html

 

Elizabeth Holmes, CEO of embattled blood testing start-up Theranos, has been charged with "massive fraud," the Securities and Exchange Commission said on Wednesday.

[writser]

Some of these threads bumped lately really didn't age well. Props for bumping it yourself.

[mrholty]

It took a while, but the other shoe dropped:

 

https://www.cnbc.com/2018/03/14/theranos-ceo-holmes-and-former-president-balwani-charged-with-massive-fraud.html

 

Elizabeth Holmes, CEO of embattled blood testing start-up Theranos, has been charged with "massive fraud," the Securities and Exchange Commission said on Wednesday.

 

Frankly she should be looking at jailtime for manslaughter if her product caused or contributed to any deaths.

I recently was a juror on a case where the guy hit a bicyclist on the shoulder of a county highway as he was trying to grab a piece of paper that he dropped between the seats and went into the shoulder.  That case of inattentive driving was not malicous but he's looking at 10 years.

 

She and others knowingly and willingly lied and defrauded customers, regulators and plenty of others.  When people get upset about inequality in this country this, the Bankers and the Freddie/Fannie discussion on here are signs that our morals are screwed up.

[DTEJD1997]

So let me get this straight?

 

Elizabeth Holmes is going to pay a $500k fine AND won't be able to be in C-suite of a public company for 10 years, and will give up 19mmm shares?  She also won't be able to profit from Theranos until $750mm is paid back to investors?

 

What about all the money already paid to Ms. Holmes from Theranos?  What about all the benefits & perks she already got?

 

It would interesting to see what Ms. Holmes CURRENT life style is like...does she live in a house?  Does she drive a nice vehicle?  Does she frequently go out to eat & drink & party with friends?

 

I am skeptical about a lot of these "financial settlements".  I would wager that while a lot of the people making these agreements lose some $$$$, their lifestyles are probably similar to what they were living BEFORE the settlement.  These things look like little more than slaps on the wrist.

 

I could be wrong, but I would be willing to wager that Ms. Holmes is not living in a 1 bedroom apartment, taking public transportation (or riding a bike) and eating ramen noodles, bananas and peanut butter.

 

 

[Liberty]

Some of these threads bumped lately really didn't age well. Props for bumping it yourself.

 

No shame in being wrong. We're all wrong very often all throughout our lives.

 

“‘Oops’ is the sound we make when we improve our beliefs and strategies. To look back at a time and not see anything you did wrong means that you haven’t learned anything or changed your mind since then.” -Eliezer Yudkowsky ( @ESYudkowsky ), ‘Rationality: From AI to Zombies’

 

With the info I had at the time, it seemed like she was doing good things. I didn't do tons of research on her company because it's not like I was going to make a private placement in it or anything, it was just a news item I saw go by, but apparently even her investors were fooled, so it wasn't as obvious as the hindsight bias of many will now make it seem...

[Cigarbutt]

Interesting post-mortem type of perspective.

In hindsight, everything becomes so clear.

 

https://www.bloomberg.com/view/articles/2018-03-14/theranos-misled-investors-and-consumers-who-used-its-blood-test

 

The author suggests that: "In a very real sense she was the biggest victim of her own fraud."

Echoing what was said above, I guess it depends on your definition of victim.

It seems to me that the "message" sent is very upsetting.

 

[Foreign Tuffett]

Some of these threads bumped lately really didn't age well. Props for bumping it yourself.

 

No shame in being wrong. We're all wrong very often all throughout our lives.

 

“‘Oops’ is the sound we make when we improve our beliefs and strategies. To look back at a time and not see anything you did wrong means that you haven’t learned anything or changed your mind since then.” -Eliezer Yudkowsky ( @ESYudkowsky ), ‘Rationality: From AI to Zombies’

 

With the info I had at the time, it seemed like she was doing good things. I didn't do tons of research on her company because it's not like I was going to make a private placement in it or anything, it was just a news item I saw go by, but apparently even her investors were fooled, so it wasn't as obvious as the hindsight bias of many will now make it seem...

 

Even though Theranos was a non-publicly traded start up, as an investor the lesson I take from the entire debacle is "how much do we really know about the companies we're investing in?" Honestly, in most cases I don't think investors (myself included) really know all that much about the companies they invest in.

 

I agree with DTEJD1997: she should be facing the prospect of prison time for being the lead participant in a large fraud. Inaccurate blood test results can easily lead to people needlessly dying. 

[alwaysinvert]

I'll be the first one to admit that I'm no sage short-seller or anything of the sort. And I obviously didn't know anything about outright fraud when this turned up first.

 

However, her whole persona was the most ridiculously blatant thing ever and could only work in an era when the feminist narrative in some quarters is strong to the point of cultishness. She was a female carbon copy of Steve Jobs with a list of platitudes. How that was ever able to get as big as it did is a fantastic testament to herd behavior.