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Theranos chief executive Elizabeth Holmes charged with massive fraud - The Washington Post
Elizabeth Holmes, founder and chief executive of the blood-testing company Theranos, has been charged by the Securities and Exchange Commission with an “elaborate, years-long fraud” in which she and former company president Ramesh “Sunny” Balwani allegedly “deceived investors into believing that its key product — a portable blood analyzer — could conduct comprehensive blood tests from finger drops of blood,” the SEC said.
Holmes agreed to a $500,000 penalty and a 10-year ban on serving as an officer or director of a public company to settle the charges, but she did not admit or deny the allegations.
Jeffrey Coopersmith, a lawyer withDavis Wright Tremaine, said in a statement that Balwani “accurately represented Theranos to investors to the best of his ability.”
business  fraud  medical  legal  gov2.0  crime  technology 
3 days ago by rgl7194
The Seven Biggest Lies Theranos Told
Theranos, led by CEO and founder Elizabeth Holmes, raised more than $700 million on the promise of a revolutionary blood-testing technology that never materialized. The Securities and Exchange Commission just charged Holmes with “massive fraud.”
Elizabeth Holmes once dazzled the world with a story that seemed almost too good to be true: Theranos, her Silicon Valley startup, was going to revolutionize medicine with its blood-testing technology.
Now Holmes’ corporation — once valued at $9 billion — has crumbled. On Wednesday, the Securities and Exchange Commission charged Theranos, Holmes, and Ramesh Balwani, the startup’s former president, with “massive fraud.” They are accused of raising more than $700 million from 2013 to 2015 through an “elaborate, years-long” series of lies and exaggerations about the company’s business, finances, and technology.
business  fraud  medical  legal  gov2.0  crime  technology 
3 days ago by rgl7194
SEC charges Theranos founder Elizabeth Holmes with fraud • WSJ
John Carreyrou:
<p>Theranos founder and chief executive Elizabeth Holmes surrendered voting control of her blood-testing company, paid a $500,000 penalty and agreed to a 10-year ban from being an officer or director in a public company in settling civil-fraud charges Wednesday with the Securities and Exchange Commission.

The settlement follows a more than two-year investigation by the SEC prompted by revelations in The Wall Street Journal. In October 2015, the Journal published an article revealing that Theranos used its proprietary blood-testing technology for only a fraction of the blood tests it offered in Walgreens stores. The article also reported that former employees were leery of the technology’s accuracy.

Theranos has since voided nearly one million test results, and Ms. Holmes agreed to a two-year federal ban from owning or operating laboratories. The company also has settled lawsuits from a hedge-fund investor and Walgreens, its former retail partner, alleging that it made misleading representations to them.

In addition to reaching a settlement with Ms. Holmes, the SEC is pursuing civil securities fraud charges in California against Ramesh “Sunny” Balwani, Theranos’s former president and chief operating officer. Ms. Holmes and Mr. Balwani jointly ran the company for seven years before he retired in May 2016…

…“The Theranos story is an important lesson for Silicon Valley,” said Jina Choi, director of the SEC’s regional office in San Francisco, in a statement released Wednesday by the agency. “Innovators who seek to revolutionize and disrupt an industry must tell investors the truth about what their technology can do today, not just what they hope it might do someday.”</p>

Carreyrou wrote <a href="">the original story in October 2015 casting gigantic doubt over Theranos</a>. At the time, Theranos was said to be worth $9bn. A win for journalism.
theranos  fraud  holmes 
4 days ago by charlesarthur
Markets and Manipulation: Time for a Paradigm Shift?
"There is a growing appreciation in economics that people have emotional vulnerabilities, commitments to social norms, and systematic irrationalities that impact their decision making and choice in the market place. The flip side of this is that human beings are susceptible to being manipulated by unscrupulous agents single-minded about marketing their services and wares. This paper reviews George Akerlof and Robert Shiller's Phishing for Phools: The Economics of Manipulation and Deception, alongside other writings in the field, and discusses how this research agenda can be taken forward. The paper shows how this new research can shed light on the ubiquity of corruption in so many societies, and proposes ideas for controlling corruption."
to:NB  economics  decision-making  market_failures_in_everything  fraud  corruption 
5 days ago by cshalizi

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