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Theranos CEO Elizabeth Holmes Finally Faces Criminal Charges

It's been some time coming, but the CEO of Theranos is finally facing criminal charges for fraud, as the WSJ's Carreyrou repor...

Friday, June 15, 2018

Delusional Investors: Theranos Edition

If you want to see Tim Draper, early Theranos investor, defend Theranos against all reality, just watch this interview. It's about 11 minutes long, and he comes out with multiple statements that are flat out wrong. To capture just three of them:
  • The SEC charges were based on innuendo: False, the SEC charges were detailed and Holmes settled them. She was accused of "massive fraud" and the SEC were very clear about that.
  • The SEC has no authority to regulate non-public companies: False, the SEC absolutely have authority to enforce fraud laws on non-public companies. To quote “The charges against Theranos, Holmes, and Balwani make clear that there is no exemption from the anti-fraud provisions of the federal securities laws simply because a company is non-public, development-stage, or the subject of exuberant media attention.”
  • Carreyrou's book Bad Blood is nothing but lies: False, read the book and his articles, they are meticulously researched with detailed interviews and documentation. Had they been malicious lies, Theranos and Holmes would have had an exceptionally strong case to sue for libel.
  • Theranos had a viable product, it was just 'beta': False, not even close. They never had anything even close to working at a level acceptable for medical diagnosis.

This is the guy who is campaigning to split California into three states, which makes as much sense as Theranos being a viable company. I'm not sure if he still genuinely believes in Holmes, or just so unwilling to admit he was a mark in a con that he's doubling down.

There's another similarly crazy interview here

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