$700M fraud, settled for $500k fine

[JEDI]

http://www.businessinsider.com/theranos-elizabeth-holmes-sec-resolution-agreement-2018-3

The SEC alleged that Theranos "made numerous false and misleading statements in investor presentations, product demonstrations, and media articles" about the company's blood-testing technology while raising more than $700 million.

Settled the charges by:
-agreed to give up financial and voting control of the company.
-Holmes has to pay a $500,000 fine.
-She cannot be a director or officer of a publicly traded company for 10 years.
note: Theranos is a privately-held company, which means she can continue to be CEO


Apparently white collar crime does pay

 

[hal2kilo]

http://www.businessinsider.com/theranos-elizabeth-holmes-sec-resolution-agreement-2018-3

The SEC alleged that Theranos "made numerous false and misleading statements in investor presentations, product demonstrations, and media articles" about the company's blood-testing technology while raising more than $700 million.

Settled the charges by:
-agreed to give up financial and voting control of the company.
-Holmes has to pay a $500,000 fine.
-She cannot be a director or officer of a publicly traded company for 10 years.
note: Theranos is a privately-held company, which means she can continue to be CEO


Apparently white collar crime does pay

No different than Trump U.

 

[MomentsofSanity]

Good thing the corporation wasn't a person huh? imagine what it would have got...

 

[thilanliyan]

From what I've read, that $700 million would first go back to investors (ie. she wouldn't get it)?

 

[a777pilot]

Whoever made this deal for the government ought to be fired.

 

[IJTSSG]

She also has to return 19 million shares of stock and convert other stock from class a to class b. That is, on paper at least, a significant amount.

What's not addressed here is the impact to all of their customers. They got off easy.

 

[UNCjigga]

Wasn't there someone on the Trump team who was a former board member for Theranos?

Oh yeah, General Mattis...he had to leave the board in January '17 after press reported his association with Theranos and potential conflicts of interest. Hmm...

 

[a777pilot]

General Mattis is a warrior.

 

[soulcougher73]

And they wonder why companies continue doing things like this. Penalty is nothing compared to the profits gained. It pays to be sleezy.

 

[interchange]

Yeah they apparently used a shell corporation to purchase lab testing machinery from other companies and used it to run their tests instead of their own unreliable technology. I wonder how serious an attempt there ever was to develop a real technological advancement since it does seem there was a (bad) product that actually existed. At some point, it just became about building wealth through obtaining investments fraudulently representing an actual product being used. It's OK not to have revenue if your valuation keeps climbing and you can keep your burn rate low enough to keep funding your growth via new investment.

 

[Sunburn74]

Yeah they apparently used a shell corporation to purchase lab testing machinery from other companies and used it to run their tests instead of their own unreliable technology. I wonder how serious an attempt there ever was to develop a real technological advancement since it does seem there was a (bad) product that actually existed. At some point, it just became about building wealth through obtaining investments fraudulently representing an actual product being used. It's OK not to have revenue if your valuation keeps climbing and you can keep your burn rate low enough to keep funding your growth via new investment.

Wow I didn't hear it was that bad or that level of fraud. That is pretty incredible stuff there.

Also didn't the company file for bankruptcy or something? Doesn't that somehow end up returning assets to investors?

 

[Indus]

So soft on white collar crime.

 

[Puffnstuff]

So soft on white collar crime.

I like to think of them as being morally and ethically flaccid.

 

[Desturel]

So soft on white collar crime.

You have to be a giant douche like PharmaBro to get any type of punishment. Funny thing is his clients actually realized a profit.

 

[feralkid]

General Mattis is a warrior.

Hooker's a good cop!