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Holmes to face maximum of 80 years in prison when she’s sentenced in September:
While she is likely to receive prison time for defrauding investors, she will be able to spend the next eight and a half months out on bail. She faces a maximum sentence of 20 years in prison for each of the four counts she was convicted of, though it’s unlikely that she’ll be sentenced to all 80 years.
Holmes has been out on bail since June 2018, when she and alleged co-conspirator Ramesh “Sunny” Balwani were charged. Both were released after posting $500,000 bonds and surrendering their passports. Now that Holmes has been convicted and is awaiting sentencing, her bond will have to be secured by property. Their trials have been repeatedly pushed back, first because of the COVID pandemic and then later because Holmes gave birth.
Part of the reason Holmes’ sentencing has been postponed is because the government still has to prosecute its case against Balwani.
Previously:
2022/01/04 - Elizabeth Holmes Found Guilty on 4 of 11 Charges
2020/09/13 - Judge in Theranos Fraud Case Orders 14-Hour Psychological Test for Holmes
2019/07/01 - Theranos Founder Elizabeth Holmes to Face Trial Next Year on Fraud Charges
2018/09/06 - Theranos to Dissolve in a Pool of Blood
2018/06/17 - Elizabeth Holmes Steps Down as Theranos CEO as DoJ Levels Charges
2018/03/15 - Blood Unicorn Fairy Tale: Theranos Founder Charged With Fraud
2017/12/24 - Theranos Given Indirect Lifeline From Softbank
2016/10/06 - Theranos Lays Off 340, Closes Labs and "Wellness Centers"
2016/08/03 - Theranos Introduces New Product to Distract from Scandal
(Score: 3, Troll) by Barenflimski on Friday January 14 2022, @10:56PM (23 children)
Did anyone but hedge funds lose their pants on this? Were there any regular Joes that lost everything here?
80 years for over exaggerating your product?
I must have missed something here.
(Score: 0) by Anonymous Coward on Friday January 14 2022, @11:23PM
Maybe the hedge funds and/or those that profit from them are trying to ensure an example is made...
(Score: 3, Insightful) by Anonymous Coward on Friday January 14 2022, @11:55PM (3 children)
Caught engaging in braggadocio without the required phallic equipment.
(Score: 0, Insightful) by Anonymous Coward on Saturday January 15 2022, @06:32PM
How is this insightful? It would have been just as much a crime if it had been a man as a woman. And whatever the sentence she does get, it's probably not going to be as long as what a man would have gotten and the prison she goes to is probably going to be nicer.
(Score: 0) by Anonymous Coward on Sunday January 16 2022, @10:47AM
Well we can't sentence a defenseless girl to prison. Maybe she could get married and bake some cookies, and leave outside work to the mean, rough boys.
(Score: 0) by Anonymous Coward on Sunday January 16 2022, @12:58PM
Oh please. Shouldn't you feminists be happy she's being punished for her scam just like any man would in her place? Or do you honestly believe in that crazy head of yours everyone was under the impression she had a penis when she was everyone's darling? Besides, women tend to get lighter sentences anyway, she'll be out in no time under parole.
(Score: 4, Insightful) by martyb on Saturday January 15 2022, @01:26AM (12 children)
See Wikipedia [wikipedia.org] and note that Walgreens got suckered in, among others. I don't know about hedge funds per se, but if an "average Joe" has a 401-K retirement fund, where do you think the fund invests the money? That "average Joe" was a part owner of Theranos.
Wit is intellect, dancing.
(Score: 1, Informative) by Anonymous Coward on Saturday January 15 2022, @08:30AM (3 children)
Your random person off the street isn't even allowed to invest in hedge funds directly or even indirectly. Additionally, their managed 401-Ks (and IRAs) cannot invest in startups and this sort of private equity without losing their protection unless they jump through all sorts of hoops, which means that they don't because the red tape isn't worth it. None of the people getting burned by this are what people would consider "average Joes."
(Score: 2) by martyb on Sunday January 16 2022, @02:06AM (2 children)
See my other commet [soylentnews.org].
Wit is intellect, dancing.
(Score: 1, Interesting) by Anonymous Coward on Sunday January 16 2022, @08:17AM (1 child)
You know I had a thought. About how long ago did you work in financial services? Because if it were in the neighborhood of 30 to maybe 20 years ago, your experience might line up with what you thought was going on. Defined-benefit plans have no restrictions imposed by the beneficiary class (because the money being invested isn't theirs yet, it is the plan's). There were also slightly different rules for how plans could invest if it had mixed funds.
(Score: -1, Troll) by Anonymous Coward on Sunday January 16 2022, @10:50AM
Or maybe he's a dipshit.
(Score: 3, Informative) by Phoenix666 on Saturday January 15 2022, @10:36PM (6 children)
It has been a while since I worked in hedge funds, but when I did we did handle investments from corporate retirement funds. Most of those funds have strict limits on how much they can invest in high risk vehicles like hedge funds. 10% of their investments was the limit then. Some of those retirement funds imposed further limits on the hedge funds like they weren't allowed to hold REITs or junk bonds or that kind of thing.
The company I worked for was a fiduciary that tracked the hedge fund portfolios on behalf of the retirement funds. If the hedge funds started to go off strategy and bought instruments they weren't supposed to, I picked up the phone to the managers and warned them to cut it out or we'd pull out the billions the retirement funds had put in. Hedge funds typically leverage many times the actual dollars they get, such that if you put in a billion they might leverage that up to $50 billion. So threatening to pull out your $1 billion investment meant they had to dump $50 billion in their positions, which makes for a reasonably potent stick to beat them with.
In a low oversight environment, in which the SEC doesn't police you, many hedge funds use their leverage positions to leverage even higher, such that that 50-to-1 leverage they had before turns into a 200-to-1. That's $200 billion worth of investments riding on $1 billion in cash. If those positions go south, it's a fuck ton of margin calls to cover.
If the average guy on the street knew how precarious the financial system is because of that sort of thing, his head would explode.
Washington DC delenda est.
(Score: 2) by Barenflimski on Saturday January 15 2022, @10:57PM (1 child)
You kinda low key blew my mind here already. Whatever that bird is that sticks its head in the sand, may have something there.
(Score: 2) by Phoenix666 on Sunday January 16 2022, @08:08PM
It might not be a kindness to mention, but it's even worse than that. As publicly traded instruments, mutual funds have to disclose what they're doing. If you invest in one, you can demand to know everything they've invested in and they have to show you. So, if the mutual funds report they made 15% returns last quarter, you can double check that.
Hedge funds are "private investment clubs," so they don't have to tell you anything they don't want to. When you give them money, you are casting it into an informational black hole. They can tell you they're making 100% returns to entice you to fork over $10 billion, but there's no way to check if they actually are. All you can do is pull your money out. If it's been a year you're expecting to have doubled your money. But if they haven't made those kind of returns then they grab another investor's principal to give to you to make it appear as if you have doubled your money. The idea is then you run off, ecstatic, to the New York Racquet Club to brag to all of your wealthy buddies about how well your hedge fund did and tell them to invest, too.
In other words, they're ponzi schemes for the wealthy. Bernie Madoff, whom you may have heard of, did exactly what I described with his hedge fund. But he made his personal money from the management fees he charged his investors, and the criminal penalties and fines are almost never as big as the money they scrape off the top, so even if they spend a couple years in a country club jail they still come out as incredibly wealthy on the other side. So there's no financial disincentive to running a ponzi scheme nee hedge fund. The worst that happens to you is that Brad and Tiffany who lost money in your fund no longer want you in their social set in the Hamptons.
But don't worry, if their funds implode and pull down the whole system, the government will bail them out using tax dollars that you earned by slinging websites for the Man. Privatize the profits, socialize the losses.
Yes, that is the ugly truth at the heart of the global system.
Washington DC delenda est.
(Score: 0) by Anonymous Coward on Sunday January 16 2022, @01:20AM
I vaguely remember this coming up about 15 years ago. Probably just some academic discussions though, nothing of practical importance.
(Score: 2) by martyb on Sunday January 16 2022, @01:27AM (2 children)
I twice worked at financial services firms, but that was many, many moons ago. You obviously have more hands-one experience than I. Thanks for the elucidation; I bow to your experience and knowledge. Thanks for the explanation... please accept my gladly-given upmod!
Wit is intellect, dancing.
(Score: 2) by Phoenix666 on Sunday January 16 2022, @07:51PM (1 child)
Thanks! It was 20 years ago, though, so things may have changed quite a bit. :-)
Washington DC delenda est.
(Score: 2) by martyb on Monday January 17 2022, @07:34PM
Let's just say it was before or just when the Pentium came out ;)
Wit is intellect, dancing.
(Score: 1, Redundant) by martyb on Sunday January 16 2022, @01:38AM
A comment below [soylentnews.org] has a much better explanation than mine. Please downmod this as "-1 Overrated".
Wit is intellect, dancing.
(Score: 2) by Rosco P. Coltrane on Saturday January 15 2022, @02:34PM (4 children)
My understanding is that quite a few Walgreens customers who had their blood genuinely tested by Theranos machines got inaccurate results, upon which important, potentially life-changing medical decisions were based.
So yeah, average Joes did get hurt. Possibly not very many, but it did happen. It's not just greedy investors - for whom I have zero sympathy.
(Score: 0) by Anonymous Coward on Saturday January 15 2022, @04:39PM (2 children)
She was found not guilty for those charges so what you are saying is legally bullshit.
(Score: 3, Insightful) by Rosco P. Coltrane on Saturday January 15 2022, @05:08PM (1 child)
Just because she herself was found not guilty doesn't mean it didn't happen, just that she was found not to he responsible for it.
(Score: 0) by Anonymous Coward on Sunday January 16 2022, @10:55AM
Suckers who take medical tests know what they're getting into. If they choose to believe the result, that's on them. I however use horse viagra for my needs.
(Score: 2) by Barenflimski on Sunday January 16 2022, @09:58PM
Interesting. I had no idea they had been doing anything but raising money.
Sorry to hear about your friends. I hope they can reverse whatever they did based on a bad test.