|Title||Blood Unicorn Fairy Tale: Theranos Founder Charged With Fraud|
|Date||Thursday March 15 2018, @05:34AM|
|from the blood-of-Jobs dept.|
The black turtleneck-wearing founder of Theranos has been accused of swindling investors out of $700 million for blood-testing technology that amounted to smoke and mirrors. However, Elizabeth Holmes will only have to pay a $500,000 fine and surrender millions of worthless shares:
The Blood Unicorn Theranos Was Just a Fairy Tale
[...] Securities and Exchange Commission today brought fraud charges against Holmes, Theranos and its former president, Sunny Balwani, and its complaint alleges pretty strongly that the investors were just as bamboozled as everybody else. In fact, Theranos made direct use of its positive press to raise money: It "sent investors a binder of background materials," which included "articles and profiles about Theranos, including the 2013 and 2014 articles from The Wall Street Journal, Wired, and Fortune that were written after Holmes provided them with interviews" and that included her misleading claims about the state of Theranos's technology. She also repeated those claims to investors directly: "For instance, Holmes and Balwani told one investor that Theranos' proprietary analyzer could process over 1,000 Current Procedural Terminology ('CPT') codes and that Theranos had developed a technological solution for an additional 300 CPT codes," even though "Theranos' analyzers never performed comprehensive testing or processed 1,000 CPT codes in its clinical lab," and in fact never processed more than 12 tests on its TSPU. And Theranos would even do a little pantomime blood-draw demonstration directly on the investors:
This initial meeting was often followed by a purported demonstration of Theranos' proprietary analyzers, the TSPU, and the miniLab. In several instances, potential investors would be taken by Holmes and Balwani to a different room to view Theranos' desktop computer-like analyzers. A phlebotomist would arrive to draw their blood through fingerstick, using a nanotainer, a Theranos-developed collection device. Then the sample was either inserted into the TSPU or taken away for processing. Based on what they saw, potential investors believed that Theranos had tested their blood on either an earlier-generation TSPU or the miniLab. As Holmes knew, or was reckless in not knowing, however, Theranos often actually tested their blood on third-party analyzers, because Theranos could not conduct all of the tests it offered prospective investors on its proprietary analyzers.
Also at The New York Times, TechCrunch, and Time.
Previously: Theranos Introduces New Product to Distract from Scandal
Theranos Lays Off 340, Closes Labs and "Wellness Centers"
Theranos Given Indirect Lifeline From Softbank
printed from SoylentNews, Blood Unicorn Fairy Tale: Theranos Founder Charged With Fraud on 2023-09-28 15:39:23