The Results of Your Test Have Returned
January 3, 2022 4:56 PM Subscribe
an eclectic mix of investors that included Rupert Murdoch, Tim Draper, Betsy DeVos, James Mattis, the Walton family and the Cox family.
Eclectic, yes...nothing in common between these folks, no sir
posted by saturday_morning at 5:46 PM on January 3, 2022 [77 favorites]
Eclectic, yes...nothing in common between these folks, no sir
posted by saturday_morning at 5:46 PM on January 3, 2022 [77 favorites]
Imagine " 'fire' in a crowded theater," but for Science.....
take a significant fraction of this systematic sin - again, from a consequentialist perspective, worse than many of the individual violent assaults that you read about - she's guilty.
I hope she gets a LONG sentence. A Message needs to be SENT.
posted by lalochezia at 5:51 PM on January 3, 2022 [3 favorites]
take a significant fraction of this systematic sin - again, from a consequentialist perspective, worse than many of the individual violent assaults that you read about - she's guilty.
I hope she gets a LONG sentence. A Message needs to be SENT.
posted by lalochezia at 5:51 PM on January 3, 2022 [3 favorites]
The government’s case in defrauding patients wasn’t as well developed. It’s not illegal for the tests to be wrong. Even very good tests can be inaccurate for various reasons and that’s not criminal. Also Theranos didn’t misrepresent to consumers how the tests worked. That the tests were evaluated on modified commercial testing equipment was fraudulently hidden from investors but isn’t really relevant to patients. So I think that’s the right finding from the jury. The prosecutors probably could have gotten some kind of criminal conviction for fraud or malpractice or something against patients but I don’t think that’s what they were trying to do here.
posted by chrchr at 5:53 PM on January 3, 2022 [52 favorites]
posted by chrchr at 5:53 PM on January 3, 2022 [52 favorites]
One of the difficulties in this case is that the government wanted to prove that Holmes and Balwani knew how badly the Theranos machines were performing. So naturally, one the main sources of evidence that the DOJ demanded was Theranos's complete database of all the tests it had performed.
Which would have been easier if Theranos hadn't turned over an encrypted copy of the data, and then conveniently lost the key and destroyed the originals a few days later.
posted by teraflop at 6:46 PM on January 3, 2022 [45 favorites]
Which would have been easier if Theranos hadn't turned over an encrypted copy of the data, and then conveniently lost the key and destroyed the originals a few days later.
posted by teraflop at 6:46 PM on January 3, 2022 [45 favorites]
I don't have a nuanced legal take, but it feels really good to see one of these "move fast and break things" people go down.
posted by wenestvedt at 6:48 PM on January 3, 2022 [39 favorites]
posted by wenestvedt at 6:48 PM on January 3, 2022 [39 favorites]
indeed. i agree. the things they broke here were laws.
we should forever remember that "laws" are the thing these kinds of people always intended to break.
posted by glonous keming at 7:15 PM on January 3, 2022 [9 favorites]
we should forever remember that "laws" are the thing these kinds of people always intended to break.
posted by glonous keming at 7:15 PM on January 3, 2022 [9 favorites]
The tests were run on modified commercial equipment.
It's not just that the tests were run on other companies equipment. Theranos diluted some samples to keep up it's one drop of blood scam. Results from tests run outside of proven protocols are useless. Theranos consistently gave erroneous results. That is relevant to patients. That's why Theranos destroyed their test database.
posted by rdr at 7:49 PM on January 3, 2022 [22 favorites]
It's not just that the tests were run on other companies equipment. Theranos diluted some samples to keep up it's one drop of blood scam. Results from tests run outside of proven protocols are useless. Theranos consistently gave erroneous results. That is relevant to patients. That's why Theranos destroyed their test database.
posted by rdr at 7:49 PM on January 3, 2022 [22 favorites]
an eclectic mix of investors that included Rupert Murdoch, Tim Draper, Betsy DeVos, James Mattis, the Walton family and the Cox family.
Eclectic, yes...nothing in common between these folks, no sir
Kind of disingenuous of Axios to imply this was a Republican backed scam. For instance, the company's lead attorney, who was also a board member, was the same man who represented Al Gore in the Florida recount.
posted by riruro at 7:59 PM on January 3, 2022 [5 favorites]
Eclectic, yes...nothing in common between these folks, no sir
Kind of disingenuous of Axios to imply this was a Republican backed scam. For instance, the company's lead attorney, who was also a board member, was the same man who represented Al Gore in the Florida recount.
posted by riruro at 7:59 PM on January 3, 2022 [5 favorites]
In other news, Al Capone was convicted of income tax evasion. Sometimes you take what you can get, and chrchr is right about medical tests in general. I think that the thing to key in on is that Holmes had big household-name connections out the wazoo--her dad was a former VP at Enron--and she still got held accountable. There was a lot of speculation that she and Sunny Balwani would try the tactic of blaming each other, and maybe both get off since they were given separate trials (Balwani's begins next week).
posted by Halloween Jack at 8:09 PM on January 3, 2022 [12 favorites]
posted by Halloween Jack at 8:09 PM on January 3, 2022 [12 favorites]
Kind of disingenuous of Axios to imply this was a Republican backed scam
That list is of people who fell for it, isn't it? Not people in on it? I hear she also got Henry Kissinger.
posted by rhamphorhynchus at 8:34 PM on January 3, 2022 [5 favorites]
That list is of people who fell for it, isn't it? Not people in on it? I hear she also got Henry Kissinger.
posted by rhamphorhynchus at 8:34 PM on January 3, 2022 [5 favorites]
For instance, the company's lead attorney, who was also a board member, was the same man who represented Al Gore in the Florida recount.
David Boies took a big steaming dump on whatever leftist cred he had some time ago.
posted by praemunire at 8:40 PM on January 3, 2022 [6 favorites]
David Boies took a big steaming dump on whatever leftist cred he had some time ago.
posted by praemunire at 8:40 PM on January 3, 2022 [6 favorites]
Yeah, after all the horrible stuff he did for Harvey Weinstein he can go to hell.
posted by Slinga at 8:43 PM on January 3, 2022 [1 favorite]
posted by Slinga at 8:43 PM on January 3, 2022 [1 favorite]
Why was all the cultural focus on her and not Balwani? Earnestly asking.
posted by pelvicsorcery at 8:51 PM on January 3, 2022 [2 favorites]
posted by pelvicsorcery at 8:51 PM on January 3, 2022 [2 favorites]
Why was all the cultural focus on her and not Balwani? Earnestly asking.
She was the public face of the company. The one giving the Ted talks and interviews and on the covers of magazines.
posted by mr_roboto at 9:07 PM on January 3, 2022 [18 favorites]
She was the public face of the company. The one giving the Ted talks and interviews and on the covers of magazines.
posted by mr_roboto at 9:07 PM on January 3, 2022 [18 favorites]
It's so hard to prosecute white collar crime. This seems like such an open and shut case and it took over a month for the prosecution to lay out it's case.
Gotta say, reading Bad Blood and other coverage the crap the Boies firm pulled to silence critics was as offensive to my sense of justice as what Holmes did. They won't be prosecuted at all.
Why was all the cultural focus on her and not Balwani? Earnestly asking.
On the tangible stuff, she was founder and head of the company. Balwani worked for her. Balwani seems like a horrid person, but he was the sidekick, not the supervillain. Holmes' defense notwithstanding.
On the intangibles, Holmes was a celebrity for being successful--with fawning profiles in Forbes, Fortune, the New Yorker, etc. She was the salesperson, the reason there was a $9 billion valuation. So of course she stayed the face of the collapse.
posted by mark k at 10:21 PM on January 3, 2022 [12 favorites]
Gotta say, reading Bad Blood and other coverage the crap the Boies firm pulled to silence critics was as offensive to my sense of justice as what Holmes did. They won't be prosecuted at all.
Why was all the cultural focus on her and not Balwani? Earnestly asking.
On the tangible stuff, she was founder and head of the company. Balwani worked for her. Balwani seems like a horrid person, but he was the sidekick, not the supervillain. Holmes' defense notwithstanding.
On the intangibles, Holmes was a celebrity for being successful--with fawning profiles in Forbes, Fortune, the New Yorker, etc. She was the salesperson, the reason there was a $9 billion valuation. So of course she stayed the face of the collapse.
posted by mark k at 10:21 PM on January 3, 2022 [12 favorites]
The Govt's case relating to defrauding patients was a much more difficult one to prove than the investor case, because Holmes had repeated the same lies to so many investors about what the device could do and, crucially for many investors, that it was deployed on medavac helicopters by the US military. The defence argument that it was the investors' fault they lost money because they didn't do their due diligence is, frankly, ridiculous and insulting, given that Holmes was presenting investors with what looked like third party scientific research, analysis and endorsement of the product, but which was actually a document produced by Theranos but bearing (without their knowledge or consent) faked logos of Pfizer and Schering-Plough.
Of course, no-one feels sorry for the Murdochs and Waltons of this world, but that's not the point; imagine if your pension provider had invested its funds in Theranos and the implications for your future if they'd done so. Holmes is no different from the the financial adviser who cons people out of their life savings by selling them stocks in worthless companies on the back of faked accountancy reports.
posted by essexjan at 12:51 AM on January 4, 2022 [17 favorites]
Of course, no-one feels sorry for the Murdochs and Waltons of this world, but that's not the point; imagine if your pension provider had invested its funds in Theranos and the implications for your future if they'd done so. Holmes is no different from the the financial adviser who cons people out of their life savings by selling them stocks in worthless companies on the back of faked accountancy reports.
posted by essexjan at 12:51 AM on January 4, 2022 [17 favorites]
Thanks for the post, Nothing. I am trying to stay off of news aggregation sites for my mental health but still wanted to know how this played out. More corporate criminals need to be held to account. Glad this one was found guilty.
posted by Bella Donna at 1:39 AM on January 4, 2022 [4 favorites]
posted by Bella Donna at 1:39 AM on January 4, 2022 [4 favorites]
More evidence for Matt Levine's "all crimes in the US are really against shareholders" thesis.
Seriously though, the main reason that it was easier to prove the investor fraud element of the case was that Holmes repeatedly and demonstrably *personally* told those lies. It is pretty easy to go after Theranos the company for lying to patients (but the company no longer exists so this is pointless) but proving that Holmes did it requires a lot more evidence because you have to trace everything back to her.
You can get away with ridiculous optimism about the future (being dumb and/or wrong is not a crime) but being "optimistic" about the past is called lying and that bit is not allowed. Note that Elon Musk says all kinds of wild things about the future but then every quarter his CFO presents a factual report showing how many cars they actually did produce and sell. Theranos was allowed to believe, and to tell its shareholders, that its microfluidic system would work but it was not allowed to pretend that it already did.
posted by atrazine at 1:43 AM on January 4, 2022 [36 favorites]
Seriously though, the main reason that it was easier to prove the investor fraud element of the case was that Holmes repeatedly and demonstrably *personally* told those lies. It is pretty easy to go after Theranos the company for lying to patients (but the company no longer exists so this is pointless) but proving that Holmes did it requires a lot more evidence because you have to trace everything back to her.
You can get away with ridiculous optimism about the future (being dumb and/or wrong is not a crime) but being "optimistic" about the past is called lying and that bit is not allowed. Note that Elon Musk says all kinds of wild things about the future but then every quarter his CFO presents a factual report showing how many cars they actually did produce and sell. Theranos was allowed to believe, and to tell its shareholders, that its microfluidic system would work but it was not allowed to pretend that it already did.
posted by atrazine at 1:43 AM on January 4, 2022 [36 favorites]
How do appeals fare, historically, in cases like these?
Here’s hoping the fallout stays systemic, avoiding the forced focus on the individual that’s so at the root of the whole hoodwink. In that sense, it’ll be significant to see if Balwani’s trial manages to avoid lurking “character” or minority tropes. So much of Theranos’ bet hinged on gaming the system (investor, regulation, media…) that only in this sense should the message resonate. So, accountability not so much for flawed individuals, but of massively complicit inequality hedges that are shown to rule the “market” as we imagine it.
My personal hooks into the case were seeing the highly deliberate Errol Morris roped into the con, and learning about her voice-change, from real to performative. There’s a high degree of spectacle at work in this story. A lot of that deserves the indictment currently delivered.
posted by progosk at 1:50 AM on January 4, 2022 [1 favorite]
Here’s hoping the fallout stays systemic, avoiding the forced focus on the individual that’s so at the root of the whole hoodwink. In that sense, it’ll be significant to see if Balwani’s trial manages to avoid lurking “character” or minority tropes. So much of Theranos’ bet hinged on gaming the system (investor, regulation, media…) that only in this sense should the message resonate. So, accountability not so much for flawed individuals, but of massively complicit inequality hedges that are shown to rule the “market” as we imagine it.
My personal hooks into the case were seeing the highly deliberate Errol Morris roped into the con, and learning about her voice-change, from real to performative. There’s a high degree of spectacle at work in this story. A lot of that deserves the indictment currently delivered.
posted by progosk at 1:50 AM on January 4, 2022 [1 favorite]
(Something to be watched is the media response to and framing of the verdict, in light of the recent BBC debacles following the Ghislaine Maxwell verdict…)
posted by progosk at 2:27 AM on January 4, 2022
posted by progosk at 2:27 AM on January 4, 2022
I find this a totally fascinating story from so many angles. Atrazine is completely right about why Holmes and Balwani are being/have been prosecuted and Musk hasn't. It's even a fine line, Holmes repeatedly lied, and knew she was lying. For example saying on tape to investors that Theranos had machines in US military helicopters when they didn't. I don't know if prosecutors have the same for Balwani.
I also have a what-if: Had Theranos been able to pull it off, and make their machines work in 2015, would there have been the same appetite for prosecution? Obviously, in this case, their machines were never going to work. However, in a different industry, with a different product a founder or CEO could end up in a very similar position but actually manage to (eventually) deliver on their product.
posted by Braeburn at 2:42 AM on January 4, 2022
I also have a what-if: Had Theranos been able to pull it off, and make their machines work in 2015, would there have been the same appetite for prosecution? Obviously, in this case, their machines were never going to work. However, in a different industry, with a different product a founder or CEO could end up in a very similar position but actually manage to (eventually) deliver on their product.
posted by Braeburn at 2:42 AM on January 4, 2022
The fact that even good tests can be inaccurate is not really relevant, when they did not do good tests. As a part of their fraud, they claimed they could do accurate tests with only one drop of blood and the machines they actually used to run the tests were not designed for that or capable of generating good results with diluted samples. Moreover, the medical fraud charges were dropped early in the case for the insane and ridiculous reason that the tests were paid for by insurance companies, so patients lost no money - a ruling which implies only the uninsured have a right to accurate medical information.
This is a clear case of the law protecting capital over people. You can explain that the charges against investors are easier to pursue - I understand and agree - but that is not a refutation, just a discussion of one of the mechanisms.
posted by Nothing at 4:10 AM on January 4, 2022 [11 favorites]
This is a clear case of the law protecting capital over people. You can explain that the charges against investors are easier to pursue - I understand and agree - but that is not a refutation, just a discussion of one of the mechanisms.
posted by Nothing at 4:10 AM on January 4, 2022 [11 favorites]
One of the difficulties in this case is that the government wanted to prove that Holmes and Balwani knew how badly the Theranos machines were performing. So naturally, one the main sources of evidence that the DOJ demanded was Theranos's complete database of all the tests it had performed.
Which would have been easier if Theranos hadn't turned over an encrypted copy of the data, and then conveniently lost the key and destroyed the originals a few days later.
I missed this part, thanks for pointing it out, teraflop. Just egregious...
posted by progosk at 4:38 AM on January 4, 2022 [2 favorites]
Which would have been easier if Theranos hadn't turned over an encrypted copy of the data, and then conveniently lost the key and destroyed the originals a few days later.
I missed this part, thanks for pointing it out, teraflop. Just egregious...
posted by progosk at 4:38 AM on January 4, 2022 [2 favorites]
It's been mentioned in this thread, but I want to formally endorse John Carreyrou's "Bad Blood" to anyone with even a passing interest in the Theranos case. It is a fascinating and angering read. Like someone mentioned above, I ended up far more angry at the investors and lawyers that enabled Holmes and silenced her early critics, and who will never be held to account. That being said, Holmes and Bilwani sounded like absolute nightmares as bosses.
The worst part was that George Schultz's grandson, who worked at Theranos, realized early on that the tests were fraudulent and attempted to alert his grandfather on the board - Schultz Sr. refused to believe his own grandson and went so far as to threaten him with legal repercussions if he went public with the allegations (if I recall correctly). Absolutely maddening.
posted by fortitude25 at 5:07 AM on January 4, 2022 [27 favorites]
The worst part was that George Schultz's grandson, who worked at Theranos, realized early on that the tests were fraudulent and attempted to alert his grandfather on the board - Schultz Sr. refused to believe his own grandson and went so far as to threaten him with legal repercussions if he went public with the allegations (if I recall correctly). Absolutely maddening.
posted by fortitude25 at 5:07 AM on January 4, 2022 [27 favorites]
In addition to the book Bad Blood check out ABC News' podcast The Dropout which appears to lean on the reporting in Carreyrou's book. Season 1 is about Elizabeth and the operations of Theranos and Season 2 (in progress) is about the trial.
The details of the actual story are bananas. You get to the end of Season 1, Episode 1 which details all sorts of wacky and bizarre business behavior and then they drop the hammer in voice over. It was something to the effect of "and Theranos would operate for 7 more years before declaring bankruptcy."
John Carreyrou was right. This company was bad from the jump.
posted by mmascolino at 5:20 AM on January 4, 2022 [5 favorites]
The details of the actual story are bananas. You get to the end of Season 1, Episode 1 which details all sorts of wacky and bizarre business behavior and then they drop the hammer in voice over. It was something to the effect of "and Theranos would operate for 7 more years before declaring bankruptcy."
John Carreyrou was right. This company was bad from the jump.
posted by mmascolino at 5:20 AM on January 4, 2022 [5 favorites]
There's also a Bad Blood: The final chapter podcast, which has covered the trial.
posted by Braeburn at 5:28 AM on January 4, 2022 [4 favorites]
posted by Braeburn at 5:28 AM on January 4, 2022 [4 favorites]
progosk, thank you for the distinction between lying about the past vs. lying about the future. That's a very elegant intellectual tool.
posted by Nancy Lebovitz at 5:48 AM on January 4, 2022 [2 favorites]
posted by Nancy Lebovitz at 5:48 AM on January 4, 2022 [2 favorites]
Schultz Sr. refused to believe his own grandson and went so far as to threaten him with legal repercussions if he went public with the allegations
In a time of widespread magical thinking even the very wealthy need fairy tales.
posted by wemayfreeze at 6:46 AM on January 4, 2022 [3 favorites]
In a time of widespread magical thinking even the very wealthy need fairy tales.
posted by wemayfreeze at 6:46 AM on January 4, 2022 [3 favorites]
Yeah, the Schultz story reminds me that the Theranos board of directors included Henry Kissinger, George Shultz, Sam Nunn, William Perry, all people who profited mightily over the years by telling American taxpayers and citizens bullshit stories and funneling public dollars into the U.S. war machine; profiting off of death and destruction.
I mean, on the one hand, yes, investors were defrauded, on the other hand giving those investors any sort of consolation feels like we're doubling down on a moral hazard that's been deeply embedded our lives. So: great that the way that the prosecutors found to give the patients defrauded some sense of closure was the route that they did, but holy shit does this speak to some deep cultural and social rot that a just society would have excised at a different level.
posted by straw at 7:04 AM on January 4, 2022 [2 favorites]
I mean, on the one hand, yes, investors were defrauded, on the other hand giving those investors any sort of consolation feels like we're doubling down on a moral hazard that's been deeply embedded our lives. So: great that the way that the prosecutors found to give the patients defrauded some sense of closure was the route that they did, but holy shit does this speak to some deep cultural and social rot that a just society would have excised at a different level.
posted by straw at 7:04 AM on January 4, 2022 [2 favorites]
Schultz Sr. refused to believe his own grandson
That's primo cognitive dissonance - if the grandson is right, then you must admit you got taken like a rube at the County fair.
posted by thelonius at 8:10 AM on January 4, 2022 [9 favorites]
That's primo cognitive dissonance - if the grandson is right, then you must admit you got taken like a rube at the County fair.
posted by thelonius at 8:10 AM on January 4, 2022 [9 favorites]
Schultz Sr. refused to believe his own grandsonIMO, the thing missing from this discussion is "exit strategy". When you're in on this floor of a company the plan is to flip it; you spread the hype and then sell it to the public and let the actual suckers and their pensions take the hit.
That's primo cognitive dissonance - if the grandson is right, then you must admit you got taken like a rube at the County fair.
posted by thelonius
The grift class are victims in this instance only because the whole thing came apart early. Because Holmes lied so much and so brazenly they couldn't sustain a long slow demise like, for example, Uber.
Schultz Sr. was essentially saying, "Don't rock the boat, Trip, until I get my payout."
posted by Horkus at 9:10 AM on January 4, 2022 [5 favorites]
Schultz Sr. was essentially saying, "Don't rock the boat, Trip, until I get my payout."
No, he really wasn't. He was a true believer. The whole gang was. The CEO of Safeway was so obsessed with his Theranos deal it contributed to him being fired. Mathis absolutely believed in it too--though the Army experts stopped it from getting too far.
It's worth reading the accounts; Schultz was definitely fooled. He wasn't inviting Holmes to family Thanksgiving dinner as part of a pump-and-dump scheme.
My take on many of these people is they convince themselves they have an eye for "talent" and can pick "winners" (meaning people, not companies.) They are often right, if for no other reason than that they can steer massive resources to the people they think are winners so they'll often succeed. Schultz thought Holmes was a genuine talent and Tyler was just a relative.
posted by mark k at 9:23 AM on January 4, 2022 [16 favorites]
No, he really wasn't. He was a true believer. The whole gang was. The CEO of Safeway was so obsessed with his Theranos deal it contributed to him being fired. Mathis absolutely believed in it too--though the Army experts stopped it from getting too far.
It's worth reading the accounts; Schultz was definitely fooled. He wasn't inviting Holmes to family Thanksgiving dinner as part of a pump-and-dump scheme.
My take on many of these people is they convince themselves they have an eye for "talent" and can pick "winners" (meaning people, not companies.) They are often right, if for no other reason than that they can steer massive resources to the people they think are winners so they'll often succeed. Schultz thought Holmes was a genuine talent and Tyler was just a relative.
posted by mark k at 9:23 AM on January 4, 2022 [16 favorites]
George Schultz's grandson, who worked at Theranos, realized early on that the tests were fraudulent
Didn't anyone with any experience in this field also realize early on that the claims were fraudulent?
posted by straight at 9:24 AM on January 4, 2022 [1 favorite]
Didn't anyone with any experience in this field also realize early on that the claims were fraudulent?
posted by straight at 9:24 AM on January 4, 2022 [1 favorite]
Didn't anyone with any experience in this field also realize early on that the claims were fraudulent?
Yes, absolutely. One of my big takeaways reading Bad Blood was how easy it was to detect that the company was a mess, and how many people did it! Those people mostly just walked away; a few spent some time trying to raise issues (to the board, investors, or others) and got massive harassment from the Boies-Schiller law firm. Since there was no profit in continuing to fight they tended to back down.
Institutionally the groups that knew stuff recognized issues and backed off quickly too. The Army, for example, quickly stopped plans to sign a contract when the appropriate medical review office saw it. The pharma collaborators like Pfizer did relatively small trial deals (~$100k) and did not renew.
Here's Andrew Gelman's notes on the book. I just saw them yesterday but he was struck by the same thing, and lays our some timelines.
FWIW my favorite bit was Holmes claiming she could detect the Ebola virus at a sensitivity of 5 copies/mL (which is what you need to compete.) But if there are only five viruses in a milliliter how can you possibly get one in a drop of blood (about a tenth of an mL)?! It's physically impossible for that to work; you can't get "half a virus" in a blood drop to measure any more than a woman can have a tenth of a baby in a month. But again, she worked connections to get a meeting with the "right people" in the FDA during the 2012 Ebola outbreak and they quickly decided Theranos was full of crap.
posted by mark k at 9:39 AM on January 4, 2022 [22 favorites]
Yes, absolutely. One of my big takeaways reading Bad Blood was how easy it was to detect that the company was a mess, and how many people did it! Those people mostly just walked away; a few spent some time trying to raise issues (to the board, investors, or others) and got massive harassment from the Boies-Schiller law firm. Since there was no profit in continuing to fight they tended to back down.
Institutionally the groups that knew stuff recognized issues and backed off quickly too. The Army, for example, quickly stopped plans to sign a contract when the appropriate medical review office saw it. The pharma collaborators like Pfizer did relatively small trial deals (~$100k) and did not renew.
Here's Andrew Gelman's notes on the book. I just saw them yesterday but he was struck by the same thing, and lays our some timelines.
FWIW my favorite bit was Holmes claiming she could detect the Ebola virus at a sensitivity of 5 copies/mL (which is what you need to compete.) But if there are only five viruses in a milliliter how can you possibly get one in a drop of blood (about a tenth of an mL)?! It's physically impossible for that to work; you can't get "half a virus" in a blood drop to measure any more than a woman can have a tenth of a baby in a month. But again, she worked connections to get a meeting with the "right people" in the FDA during the 2012 Ebola outbreak and they quickly decided Theranos was full of crap.
posted by mark k at 9:39 AM on January 4, 2022 [22 favorites]
Your comment is reasonable, and I'd have to reread the book, but my understanding that the few dissenting voices either (1) didn't have access to sympathetic media to make their case or (2) were smeared and portrayed as haters and threatened with severe legal action. Keep in mind people like Boies are very powerful and very intimidating and as so often the case with the "justice" system, the process would be the punishment.
Edit: what mark k said.
posted by fortitude25 at 9:41 AM on January 4, 2022 [1 favorite]
Edit: what mark k said.
posted by fortitude25 at 9:41 AM on January 4, 2022 [1 favorite]
My cousin appears in the Dropout podcast, which kind of blew me away. (He is an ad exec in LA.)
When I saw how her voice changed I honestly wondered if it was a mental illness of some kind. I know that's terrible, but I couldn't imagine a person choosing to change their affect so...clumsily, I guess
posted by wenestvedt at 9:47 AM on January 4, 2022 [3 favorites]
When I saw how her voice changed I honestly wondered if it was a mental illness of some kind. I know that's terrible, but I couldn't imagine a person choosing to change their affect so...clumsily, I guess
posted by wenestvedt at 9:47 AM on January 4, 2022 [3 favorites]
From Wikipedia, in re George Schultz and his grandson Tyler:
"In a 2019 media statement, Shultz praised his grandson for not having shrunk "from what he saw as his responsibility to the truth and patient safety, even when he felt personally threatened and believed that I had placed allegiance to the company over allegiance to higher values and our family. ... Tyler navigated a very complex situation in ways that made me proud.""
Relieved to see that this happened. The stand Tyler took was truly courageous, and his grandfather's conduct was horrible.
posted by billjings at 9:54 AM on January 4, 2022 [9 favorites]
"In a 2019 media statement, Shultz praised his grandson for not having shrunk "from what he saw as his responsibility to the truth and patient safety, even when he felt personally threatened and believed that I had placed allegiance to the company over allegiance to higher values and our family. ... Tyler navigated a very complex situation in ways that made me proud.""
Relieved to see that this happened. The stand Tyler took was truly courageous, and his grandfather's conduct was horrible.
posted by billjings at 9:54 AM on January 4, 2022 [9 favorites]
What I remember about the Schultz mess is that Tyler ended up with a $400,000 legal bill fending off the Boies-Schiller law firm. Tyler's parents helped out, but this shows you the impossible cost of being a whistle-blower.
It's been a while since I read "Bad Blood", but the other sad aspect of the story is that Holmes & Balwani were terrible bosses and abused their employees. (One scientist was driven to suicide if memory serves.) That kind of bad behavior needs to prosecuted too. Maybe that's for the civil courts?
posted by of strange foe at 10:20 AM on January 4, 2022 [9 favorites]
It's been a while since I read "Bad Blood", but the other sad aspect of the story is that Holmes & Balwani were terrible bosses and abused their employees. (One scientist was driven to suicide if memory serves.) That kind of bad behavior needs to prosecuted too. Maybe that's for the civil courts?
posted by of strange foe at 10:20 AM on January 4, 2022 [9 favorites]
The stand Tyler took was truly courageous, and his grandfather's conduct was horrible.
Tyler wrote a long piece published on Audible about his experience; the thing that struck me most vividly was that while Boies/Schiller was harrassing him, his grandfather provided no support, and his parents nearly lost their home.
That's how deep George Schultz was into this.
posted by suelac at 10:27 AM on January 4, 2022 [9 favorites]
Tyler wrote a long piece published on Audible about his experience; the thing that struck me most vividly was that while Boies/Schiller was harrassing him, his grandfather provided no support, and his parents nearly lost their home.
That's how deep George Schultz was into this.
posted by suelac at 10:27 AM on January 4, 2022 [9 favorites]
…"laws" are the thing these kinds of people always intended to break.
When you get lauded as The Next Big Thing and paper-valued in Billion$, you must consider how much illegality you can afford.
posted by cenoxo at 10:29 AM on January 4, 2022
When you get lauded as The Next Big Thing and paper-valued in Billion$, you must consider how much illegality you can afford.
posted by cenoxo at 10:29 AM on January 4, 2022
I once worked for a startup that was trying to turn some Big Science into a niche commercial product. It was a small company (never more than 50 people at it's peak) run by people who knew what they were doing, were realistic about expectations, and above all were very nice. I really enjoyed working there and even allowed myself to take some pride in what we were doing. But the roadmap was always a little longer than what the investors wanted and the market just wasn't big enough to justify throwing more money at it, so the place went belly up after a few years.
Theranos makes me angry. That they were able to keep up the grift for so long for such an obviously bogus product while being so terrible to their employees.
posted by RonButNotStupid at 10:35 AM on January 4, 2022 [15 favorites]
Theranos makes me angry. That they were able to keep up the grift for so long for such an obviously bogus product while being so terrible to their employees.
posted by RonButNotStupid at 10:35 AM on January 4, 2022 [15 favorites]
Didn't anyone with any experience in this field also realize early on that the claims were fraudulent?
Basically, yes. It's worth noting that there are loads of specialist biotech investors who make their living putting money into companies (like Biotech and Moderna) at early stages and that major pharmaceutical companies are also very active investors in interesting ideas, often taking small equity stakes and making deals for access to technology that might work. None of these investors were seen anywhere near this deal because they are run by people with scientific backgrounds.
posted by atrazine at 11:02 AM on January 4, 2022 [8 favorites]
Basically, yes. It's worth noting that there are loads of specialist biotech investors who make their living putting money into companies (like Biotech and Moderna) at early stages and that major pharmaceutical companies are also very active investors in interesting ideas, often taking small equity stakes and making deals for access to technology that might work. None of these investors were seen anywhere near this deal because they are run by people with scientific backgrounds.
posted by atrazine at 11:02 AM on January 4, 2022 [8 favorites]
Yeah, I hope they put Cookie Monster away for a long time, “pour encourager les autres.”
posted by leotrotsky at 11:25 AM on January 4, 2022
posted by leotrotsky at 11:25 AM on January 4, 2022
I think that's also why the context of this trial is rubbing people (including myself) the wrong way. The court-recognized "victims" were all people who invested without doing their due diligence and so much of the case was built on them having taken everything they were told about the company at face value.
I get that there are rules governing how corporations can interact with their investors (lying about the past/future is a great model to conceptualize it!) but these people all had an overabundance of privilege and would have had no problem spending the time and energy to be a little bit skeptical. It doesn't help that some of them would be very quick to defend the wisdom of the free market and it's ability to police itself if anyone tried to implement new regulations.
posted by RonButNotStupid at 12:01 PM on January 4, 2022 [4 favorites]
I get that there are rules governing how corporations can interact with their investors (lying about the past/future is a great model to conceptualize it!) but these people all had an overabundance of privilege and would have had no problem spending the time and energy to be a little bit skeptical. It doesn't help that some of them would be very quick to defend the wisdom of the free market and it's ability to police itself if anyone tried to implement new regulations.
posted by RonButNotStupid at 12:01 PM on January 4, 2022 [4 favorites]
One of the worst things about this saga is this:
Who is paying for Holmes’s five star defense? It’s probably costing a million plus, and Balwani’s going to be in the same boat.
The answer is not ‘her super-rich new boyfriend/husband’. Her defense is (probably) paid for by an insurance policy Executives at companies like Theranos usually carry insurance policies that pay for legal counsel in the event of prosecution. She used the money she scanned out of investors to pay for her legal defense against prosecution for scamming.
posted by bq at 12:25 PM on January 4, 2022 [5 favorites]
Who is paying for Holmes’s five star defense? It’s probably costing a million plus, and Balwani’s going to be in the same boat.
The answer is not ‘her super-rich new boyfriend/husband’. Her defense is (probably) paid for by an insurance policy Executives at companies like Theranos usually carry insurance policies that pay for legal counsel in the event of prosecution. She used the money she scanned out of investors to pay for her legal defense against prosecution for scamming.
posted by bq at 12:25 PM on January 4, 2022 [5 favorites]
Thoughts on the Elizabeth Holmes Verdict, from Derek Lowe, In the Pipeline
posted by lalochezia at 5:01 PM on January 4, 2022 [1 favorite]
posted by lalochezia at 5:01 PM on January 4, 2022 [1 favorite]
I really feel that Theranos is just the company that got caught when the music ended. They are the culmination of Silicon Valley startups that began with Uber, lead to WeWork, and Theranos is just the latest.
posted by herda05 at 12:34 AM on January 5, 2022 [2 favorites]
posted by herda05 at 12:34 AM on January 5, 2022 [2 favorites]
Thoughts on the Elizabeth Holmes Verdict, from Derek Lowe
In reply to a couple of comments that point out that actually none of the real SV players were Theranos investors, and that thus to frame Theranos as a (failed) Silicon Valley story is actually buying into a spin they were trying to give themselves all along in terms of image and marketing, Lowe is planning a follow-up, acknowledging this. It seems significant, while not absolving SV mentality as such, to keep in focus who were the players and the played involved here.
posted by progosk at 1:20 AM on January 5, 2022 [5 favorites]
In reply to a couple of comments that point out that actually none of the real SV players were Theranos investors, and that thus to frame Theranos as a (failed) Silicon Valley story is actually buying into a spin they were trying to give themselves all along in terms of image and marketing, Lowe is planning a follow-up, acknowledging this. It seems significant, while not absolving SV mentality as such, to keep in focus who were the players and the played involved here.
posted by progosk at 1:20 AM on January 5, 2022 [5 favorites]
progosk, that is a framing that I've seen almost everywhere, even the FT which is usually better informed, and it is indeed lazy and wrong.
I actually do agree with the through-line of Derek's writing across the years on how biopharma is very different from the software world for all the reasons he states and he is right that statements by people from SV over the years of how they'll "just" do X, Y, and Z to fix drug discovery have been wrong for those reasons. I don't think that's what happened here though.
I think this is cargo-cultism though, where they went out of their way to make it look as "techy" as possible and therefore to people who didn't understand why a company like Apple or SpaceX works apart from some hazy idea about charismatic founders who worked really hard and minimalist furniture the whole thing looked plausible.
There is a similarity with Uber and WeWork which is that they are in businesses with low margins (and actually, they themselves only ever earned (at best) low margins so they're not exceptions either and used a tech "sheen" to get themselves valued as if they were software businesses. The difference though is that Uber and WeWork actually do have real businesses which sell working services.
It's a useful contrast between Adam Neumann, also a total fantasist, and Holmes. Neumann spun an incredible line of bullshit at WeWork but he did not outright lie to shareholders (or to others really) about statements of fact. As a result, despite "losing" by being drummed out of his own company, he is still almost a billionaire and will spend the rest of his life doing organic blow with a jade egg plug in his ass or whatever rather than going to prison and dying penniless. Ditto Travis Kalanick at Uber. Everyone loves the "fall" narrative but again, this guy is still immensely rich and also definitely not going to prison so its not like he really "failed" in any meaningful way as far as I'm concerned.
If she had been smarter, like these other people, about the permissible limits of deception, then the company would still have failed but she would be walking away with some moderate number of millions from the wreckage to write her memoirs on the beach.
posted by atrazine at 2:10 AM on January 5, 2022 [7 favorites]
I actually do agree with the through-line of Derek's writing across the years on how biopharma is very different from the software world for all the reasons he states and he is right that statements by people from SV over the years of how they'll "just" do X, Y, and Z to fix drug discovery have been wrong for those reasons. I don't think that's what happened here though.
I think this is cargo-cultism though, where they went out of their way to make it look as "techy" as possible and therefore to people who didn't understand why a company like Apple or SpaceX works apart from some hazy idea about charismatic founders who worked really hard and minimalist furniture the whole thing looked plausible.
There is a similarity with Uber and WeWork which is that they are in businesses with low margins (and actually, they themselves only ever earned (at best) low margins so they're not exceptions either and used a tech "sheen" to get themselves valued as if they were software businesses. The difference though is that Uber and WeWork actually do have real businesses which sell working services.
It's a useful contrast between Adam Neumann, also a total fantasist, and Holmes. Neumann spun an incredible line of bullshit at WeWork but he did not outright lie to shareholders (or to others really) about statements of fact. As a result, despite "losing" by being drummed out of his own company, he is still almost a billionaire and will spend the rest of his life doing organic blow with a jade egg plug in his ass or whatever rather than going to prison and dying penniless. Ditto Travis Kalanick at Uber. Everyone loves the "fall" narrative but again, this guy is still immensely rich and also definitely not going to prison so its not like he really "failed" in any meaningful way as far as I'm concerned.
If she had been smarter, like these other people, about the permissible limits of deception, then the company would still have failed but she would be walking away with some moderate number of millions from the wreckage to write her memoirs on the beach.
posted by atrazine at 2:10 AM on January 5, 2022 [7 favorites]
If she had been smarter a wilier grifter, like these other people
ftfy...
posted by progosk at 5:03 AM on January 5, 2022
ftfy...
posted by progosk at 5:03 AM on January 5, 2022
One thing that I think deserves attention is that Holmes was involved in New Thought/the Secret-- the belief that if you want something really hard and clearly, the universe will give it to you.
"What would you do if you knew you could not fail?"
posted by Nancy Lebovitz at 5:51 AM on January 5, 2022 [10 favorites]
"What would you do if you knew you could not fail?"
posted by Nancy Lebovitz at 5:51 AM on January 5, 2022 [10 favorites]
Oh and also her Dad worked for Enron. The Aristocrats!
posted by bq at 6:53 AM on January 5, 2022 [3 favorites]
posted by bq at 6:53 AM on January 5, 2022 [3 favorites]
Her dad worked for Enron? Wow, grifters all the way down. Um, as usual.
posted by Bella Donna at 7:00 AM on January 5, 2022
posted by Bella Donna at 7:00 AM on January 5, 2022
yeah I think the connections to Hoover Institute types were via Dad
posted by thelonius at 7:04 AM on January 5, 2022
posted by thelonius at 7:04 AM on January 5, 2022
Didn't anyone with any experience in this field also realize early on that the claims were fraudulent?
From what I can tell, basically all the people with experience in the field realized early on that the claims were fraudulent, or at least much too good to be true on their face.
This is why all of Theranos' investors came from outside the bio/pharma world. I'm sure this was turned into some sort of selling point ("we're outsiders, disrupting the lazy incumbents!"), but it certainly should have been a whole theme park full of red flags.
My take on many of these people is they convince themselves they have an eye for "talent" and can pick "winners" (meaning people, not companies.)
Yes, this. It's a very common blind spot / misconception for people who have been successful, particularly in areas where their success is difficult to attribute to any one singular stroke of good luck (i.e. they weren't Bill Gates showing up with MS-DOS at the exact right place at the exact right time), to attribute their success to some innate, je ne sais quoi "leadership" ability. Many very successful people have an almost-pathological (I would argue it is pathological) need to assign credit for their own success to their own actions or abilities somehow, rather than crediting it to dumb luck or the compound-interest effect of opportunity creating more opportunity. And this leads, perversely but sometimes hilariously, to very rich (and probably not entirely incompetent, within their own domains) people getting taken by obvious scams, as long as the scammer can play into the rich person's desire to view themselves as a great "thought leader" or "talent scout" or whatever they think their secret sauce is.
I don't know if anyone has done a solid study of the effect, but I am convinced there is a sort of Dunning–Kruger cognitive trap, where people can become so successful that they lose the ability to see impending failure, right up until they fall face-first into it.
posted by Kadin2048 at 1:22 PM on January 7, 2022 [2 favorites]
From what I can tell, basically all the people with experience in the field realized early on that the claims were fraudulent, or at least much too good to be true on their face.
This is why all of Theranos' investors came from outside the bio/pharma world. I'm sure this was turned into some sort of selling point ("we're outsiders, disrupting the lazy incumbents!"), but it certainly should have been a whole theme park full of red flags.
My take on many of these people is they convince themselves they have an eye for "talent" and can pick "winners" (meaning people, not companies.)
Yes, this. It's a very common blind spot / misconception for people who have been successful, particularly in areas where their success is difficult to attribute to any one singular stroke of good luck (i.e. they weren't Bill Gates showing up with MS-DOS at the exact right place at the exact right time), to attribute their success to some innate, je ne sais quoi "leadership" ability. Many very successful people have an almost-pathological (I would argue it is pathological) need to assign credit for their own success to their own actions or abilities somehow, rather than crediting it to dumb luck or the compound-interest effect of opportunity creating more opportunity. And this leads, perversely but sometimes hilariously, to very rich (and probably not entirely incompetent, within their own domains) people getting taken by obvious scams, as long as the scammer can play into the rich person's desire to view themselves as a great "thought leader" or "talent scout" or whatever they think their secret sauce is.
I don't know if anyone has done a solid study of the effect, but I am convinced there is a sort of Dunning–Kruger cognitive trap, where people can become so successful that they lose the ability to see impending failure, right up until they fall face-first into it.
posted by Kadin2048 at 1:22 PM on January 7, 2022 [2 favorites]
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posted by Nothing at 5:43 PM on January 3, 2022 [52 favorites]