This explains to some extent why investors might have given the company that valuation of 9 billion. If the company faked demos and portrayed results obtained on non Theranos tech as Theranos tech results, most investors can't be blamed for believing the tech worked and it was only a matter of time before all tests could be performed by the tech.<p>What is baffling to me is unless the data was doctored why didn't any one of the medical consultants or partners bring this up sooner? Why did it take a deposition to reveal this? I'm sure whistleblower protections would have been provided to anyone working there with this knowledge who chose to make it public.
Wow. Okay, this takes it from "Shit happens and people can be totally deluded" to actual, genuine fraud.<p>Edit: Also, how can people be that stupid? You have to know the truth will eventually come out? Right? Or, no?<p>I don't get it.
So will Holmes go to prison? A green card holder in Texas was just sentenced to eight years in prison for voting in a US election. Surely Holmes will go away much longer right?
Can't read the Journal article so not sure if it has this or not, but reply from Theranos:<p>This is a one-sided filing by one party to litigation, and we will respond at the appropriate time in the appropriate forum. We disagree with much of what PFM alleges in its complaint. This is not, however, the time or place to contest their mischaracterizations of the record. We will litigate this case in court, where it belongs. What we will say now is that the items on which PFM focuses have nothing to do with why PFM invested, and they amount to a repackaging of allegations the media have already reported for nearly two years.<p>As for the tender offer: As previously disclosed, Theranos is in the midst of a tender offer involving its most significant shareholders. Elizabeth Holmes’ use of her own shares to recapitalize our C-2 and C-1 investors—and thereby prevent dilution to our other shareholders—is consistent with her longstanding, personal commitment to doing the right thing for the Theranos shareholder base. This tender offer has been in discussion between Theranos and its shareholders since July 2016. To date, more than 99% of C-2 and C-1 investors other than PFM have chosen to participate.<p>PFM, a multi-billion dollar hedge fund, opposes the transaction, and is asking the Court to stop the tender offer because it is “unfair” specifically and only to PFM. In response to PFM’s suit, the Court suspended the tender offer for a month in order to permit sufficient time for the court to review the transaction. PFM’s effort to enjoin the tender offer is meritless; their legal theories are self-serving and would harm the rest of the Theranos shareholders. The Company is vigorously opposing PFM’s new suit and looks forward to completing the transaction with its shareholders.<p>From: <a href="https://techcrunch.com/2017/04/21/theranos-says-it-has-been-mischaractarized-in-allegations-the-company-faked-tests-and-boosted-financials/" rel="nofollow">https://techcrunch.com/2017/04/21/theranos-says-it-has-been-...</a><p>There will never be enough popcorn for the Theranos saga.
I bet there are many other boardrooms around Silicon Valley who are panicking over this. There's so much pressure to be immediately profitable and show predictable year over year growth. How many have faked user trials or cooked the books in ways that would make Enron blush?
My question is, who is still working at this place and why???<p>Also, some reviews here are amusing and frightening:<p><a href="https://www.glassdoor.com/Reviews/Theranos-Reviews-E248889.htm" rel="nofollow">https://www.glassdoor.com/Reviews/Theranos-Reviews-E248889.h...</a>
I will keep repeating that: The fact that Elizabeth house is not FBI raided and she is not in jail without ability to talk to co-conspirators just show how you can run your scam enterprise by simply having the right people on your board.
Is this the first total collapse of a "unicorn" this time around? I can't think of any recent, high profile disintegrations of this order of magnitude.
"Perhaps Holmes should call up the folks over at Magic Leap, they know a thing or two about getting busted for fake demonstrations and overselling technology." [1]<p>[1] <a href="http://nymag.com/selectall/2017/04/theranos-staged-fake-blood-tests-for-investors.html" rel="nofollow">http://nymag.com/selectall/2017/04/theranos-staged-fake-bloo...</a>
HN is on fire today. Zecco and now Theranos. I'm getting the feeling that we are going to see more and more stories like this in the near future.<p>Theranos running fake tests is just another example of the type of charlatans enabled by socioeconomic lineage.<p>> Theranos plans to offer investors shares in the company in exchange for them not filing lawsuits against the embattled blood-testing company.<p>How far removed can you be from reality to even think like this?
Companies like this are a good reason to end limited liability for corporations.
Corporations arent people, and the people behind them escape with golden parachutes.
This all sounds preliminary to me. Based on the headline and one paragraph I was able to read (not pay-walled), this doesn't necessarily indicate malicious intent or foul play. Big companies are complicated, and they do things in weird ways sometimes for reasons that aren't immediately obvious.<p>It's amazing how quickly the winds of the internet shift to absolutely condemn a person/company before all (or any) of the facts are in. The world is a better place when we all extend a benefit of doubt to our fellow humans and there creations.
How is it always WSJ busting Theranos? is a competitor funding their "investigative journalism"? Not to say the article is untrue, just the super hard-on WSJ has for Theranos is mysterious.