Slashdot Mirror
Theranos Used Shell Company To Secretly Buy Outside Lab Equipment, Says Report (arstechnica.com)
An anonymous reader quotes a report from Ars Technica: On Friday, the Wall Street Journal reported that the company "allegedly misled company directors" regarding its lab tests and used a shell company to buy commercial lab gear. These are just a few of the new revelations made by the Journal, which also include fake demonstrations for potential investors. The new information came from unsealed depositions by 22 former Theranos employees or members of its board of directors. They were deposed by Partner Fund Management LP, a hedge fund currently suing Theranos in Delaware state court. Theranos is also facing multiple lawsuits in federal court in California and Arizona, among others. The Journal, which did not publish the new filings, quoted former Theranos director Admiral Gary Roughead (Ret.), as saying that he was not aware that the company was using "extensive commercial analyzers" until it was reported in the press. The Journal described the filings as "some of the first substantive details to emerge from several court proceedings against the company, though they include only short excerpts from the depositions."
By the time Elizabeth Holmes gets out of jail, she'll be so old no one (even Slashdot readers) would want to fuck her.
I thought women made better CEOs: more honest, less greedy, less "old boy network."
Did the media lie to me?
The Feds have been investigating her and her company for a long time and here are details of obvious illegal activity (fraud) discovered by a civil investigation during the course of an investor lawsuit.
I have no idea what it is with startup founders -- they all seem to be playing in the same swamp. I guess it's the corporate veil -- it's amazing how much power company owners have compared to individuals. It's pretty obvious that Theranos' technology was a complete fraud. Maybe it didn't start out that way, but somewhere along the way they must have realized that they can't reproduce the results that conventional equipment gave. It must have been much more pleasant to take investors' money and live large for a while longer than it would be to admit failure.
It's not just billion-dollar startups, or megacorporations either. Even the smallest businesses seem to be dishonest to some degree, and I think it really is the fact that a corporation is a separate entity that enjoys personhood under the law. I know so many people who are running little incorporated side businesses and paying zero taxes, or funneling all of their personal purchases through the company to hide any profits. I think that once someone realizes that no one's looking and they're responsible for financial reporting, there's an intense desire to cheat. To me, this is what makes business owners' complaints about over-regulation and taxes ring hollow. Businesses don't pay tax the same way individuals do, and over-regulation to me amounts to filling out paperwork that your accounting software can fill out for you automatically. Business owners are getting such a good deal compared to standard wage-earners; they have no reason to complain.
Modded -1 because it's much easier to suppress the question than to answer it.
Theranos used to be an editor here.
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
Is this a fake news story designed to ruin Theranos?
Thanos needs to use a shell company? Oh... er... no need to assemble, everyone. Back to whatever you were doing.
All of Ms. Holmes "billions" were based on the valuation of Theranos, which is now effectively nothing. I'm sure she has personal debt's that were based on the assumption of wealth and creditors will be trying to claw that back as fast as they can now too (This includes Theranos, which loaned her $25 million against her now worthless stock options). I don't believe her family in unusually wealthy, both of her parents were government workers of average means. So she's pretty much screwed, I hate to say this and I hope it doesn't happen (to her or anyone) but I would not be surprised to see her obituary before the end of the year. From what I've read of her I don't think she's going to take this type of public failure and shaming well, though it may just drive her to double down on something else.
I've got all my cash in Juicero stock !
One wonders at the (lack of) common sense here. The premise is, "we will do blood testing on incredibly small vials of blood, because some people have difficulty with large specimen collection, and large specimen collection is inconvenient or impossible."
What gets me is this is NOT a "Eureka!" moment like Uber or AirBnB or something.
This is not a combination of old idea + do it better + better marketing, like Facebook.
This is something that requires non-trivial technical invention in an area that is already attempting to innovate. Somehow, no one thought "gee, I'll bet labs already try to get specimens with minimal fuss." It's instead like they thought "wow, no one thought of this! Once we had the idea, we just had to do that instead of this."
This meant once Theranos said "hey, we thought of this, so we decided to invent that" everyone went along... like a Kickstarter for a better travel pillow or boredom toy, rather than a complex set of scientific processes designed to support other scientific processes. This, in turn, almost requires that you accept that the VC realized this, and only hoped that it went far enough for them to cash out before imploding. I mean, there's practically no way to assume they were that naive.... is there?