Theranos Faces Congressional Inquiry Over Faulty Blood Tests (techcrunch.com)

An anonymous reader writes: The U.S. House of Representatives sent a letter to blood analysis startup Theranos asking for them to explain their failure in providing accurate results to patients using its proprietary blood test technology. The company has faced serious backlash after government and regulatory agencies questioned the results of their proprietary 'Edison' machine, that the company claimed could detect hundreds of diseases using a single drop of blood. Not only have the feds proposed banning founder and CEO Elizabeth Holmes and the company president Sunny Balwani from the blood-testing business for two years, but Holmes' net worth has been cut from $4.5 billion to zero. Most recently, Walgreens decided to cut ties with the company. House Democrats Frank Pallone, Gene Green and Diana DeGette sent the letter on June 30th, asking Holmes to explain what went wrong, what steps the company is taking to help medical professionals and patients who might have been affected by the manipulated results, and how Theranos plans to comply with regulators. "Given Theranos' disregard for patient safety and its failure to immediately address concerns by federal regulators, we write to request more information about how company policies permitted systemic violations of federal law," reads the letter. Theranos says it plans to clear things up with these lawmakers.

Comments

Put that bitch in Jail

[Anonymous Coward]

Why are we even bothering with enquiries?

There is so much documented fraud.

One county. Two classes.

Small Government?

[dbIII]

With the "small government" approach the scam would continue.
"Libertarians" take note.
Being free to scam others without consequence doesn't do a lot for the liberty of those being scammed.

Re:Small Government?

[JaredOfEuropa]

Some libertarians have a naïve belief that in a free market, good honest companies will always prevail over fraudsters. And they are not completely wrong... in the long run. Fraud generally is discovered eventually and bad companies get replaced with better ones, but often not before massive damage has been wrought. And where one fraudster succeeds even for a while, others will try and follow in his footsteps.

Which is why other libertarians do see a role for government to provide some ground rules and provide oversight to actually enforce those rules. Even if only because it's far cheaper than letting fraudsters run wild.

She gave off all the classic signs.

[EmperorOfCanada]

First she was making it all about her, not about brilliant scientists, but about her her her. Second is that the stuff about her was all about how she is better than the rest of us. Admitted to the top university, gets up 2 hours before she goes to bed, works 28 hour days; basically all that in your face, I am better than you Type-A bullshit.

But the icing on the cake is that after she had raised funds from non-pharma types she just kept promoting. I could barely crack a science publication or a science section in any publication with her single drop of blood hype.

Where I am from the government is huge on being able to "pick a winner" so about twice a year I see the same micro-bubble that is hype hype hype with some front man, usually some vaguely good story about rubber that will make tires good for 300,000km. Then a nice line-up of vaguely important local investors. And just before it all blows up they are in some local business publication with the title "Top 40 under 40' or some other bullshit.

Then it all goes to hell, there are recriminations about government money in the toilet, a useless audit, and then it is forgotten as the latest batch of sure thing winners follow down the same path.

While all this is amusing/enraging; the worst part is that she has now made it nearly impossible for any legitimate company to actually do this research. If some real bio-researcher comes up with some blood tests needing only one drop they won't get one investor to take their calls or conferences to let them talk. They might as well work on cold fusion or herbal cancer cures.

Re:She gave off all the classic signs.

[EmperorOfCanada]

I have met so many Marissa Mayers in my life and every one of them left a horrible taste in my mouth. When they look at a person it is only to see if they are someone they can use. If not you can actually see the person vanish from their perception. But if the person is someone they can use as another run in their ladder climbing, their eyes light up and the wheels are turning. With women it often manifests with this sudden becoming of what their target is looking for. Sports hero, lover, tease, politically astute, listener, etc

The second they find a higher rung, the earlier rung is discarded like chewed gum.

What pisses me off about these types is that even when the people they have wronged finally are able to expose them, they somehow land in more success. I have personally witnessed one case where the woman was pretty much thrown to the street in disgrace by a collective action of upper management and the entire board of directors, yet a few months later I read that she was appointed to be on the board of directors of a large monopoly and later was a board member on a number of other companies. All high paying board memberships with many juicy privileges. All that with not a single person who would have anything but nasty things to say about her. She even ripped off the person who bought her house. How the hell?

So in the case of this single drop of blood woman as well as Marissa Mayer, I predict a horribly long successful future where they go from organization to company turning them into complete crap and somehow being able to maintain a straight face while declaring success. Failures that will swell their bank accounts.

Re:What went wrong

[ShanghaiBill]

What went wrong is they got caught. That's what "went wrong".

It is almost certainly more complicated than that. There is no way that a fraud like this could actually work in the long run, and any sensible investor would know that. What is more likely is that Elizabeth really thought her tech would work, hyped it to get capital, thus inflating expectations. Then she had too much pride to back down when the tech failed, so she started fudging a little, to buy time to fix the problems. But she couldn't fix the problems, so she then had a choice to either admit failure, and admit to the initial fudging, or ... dig deeper. Just like Bernie Madoff, she grabbed a shovel.

Re:I remembe seeing her on TV

[penguinoid]

that the company claimed could detect hundreds of diseases using a single drop of blood.

bleeding edge bio-tech

Too bad it turned out to be bleeding edge marketing, and now people are out for blood.

Re:What went wrong, Nothing went wrong

[Ramze]

That's the thing... the CEO didn't cash out her chips before the value of her stock in the company hit zero. I'm sure she got a lovely salary, but she could have made out like a bandit if she'd sold earlier. Her mistake was thinking she could play magician forever w/ the slight of hand and sensationalism.

It's a shame corporations can't be thrown in jail for fraud like people... shame we can't at least put the CEO in jail for massive, obvious fraud -- at least to her shareholders if not to the public, too.

Re:What went wrong, Nothing went wrong

[monkeyxpress]

The other possibility is that she also was played. You see this regularly in the property developer market - banks need someone charismatic to lend money too (which creates profit for them), but who is stupid/egoist enough to not wonder why this friendly bank guy is giving them all this money. The banks charm them into securing whatever earthly possessions they and their grandma have against these loans, and ensure the bank is first tier lender. While things are booming this money feeding machine makes the banks huge profits. When the bubble pops, the banks quickly liquidate the guy, recover their part of the loans, and leave the second tier lenders and bankrupted developer to wear the losses.

If she didn't setup a private trust and move a few million into it when she was a billionaire, then she really does seem like the sort of gullible charismatic puppet bubble investors look for.

Re:I smell a rotten fish

[Noble713]

How in the world did these people get a license to begin with?

Have you looked at Theranos' Board of Directors? It's stacked with seriously connected people from the Military-Industrial Complex. Who knows what kind of strings they pulled.