Knock Knock. Who’s There? SEC. SEC Who? Uh Oh.

holmes1

Looks like the once “darling” of the media world, touted as the richest brightest mind of entrepreneurship, is going to be trading her black turtleneck for an orange jumpsuit.

Elizabeth Holmes, who, as far as I can tell, pulled off the biggest scam in in modern history by inventing a no-good blood testing system.

From the WSJ:

Theranos Inc. 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.

In its complaints against Holmes and Balwani, the SEC alleged they raised more than $700 million from investors in an elaborate, yearslong fraud in which they exaggerated or made false statements about the company’s technology, business and financial performance.

While telling investors they had developed a portable blood analyzer that could conduct “the full range” of laboratory tests from just a few drops of blood pricked from a finger, they were in fact conducting the vast majority of the tests offered to consumers in Walgreens stores on commercial analyzers manufactured by other companies, according to the SEC’s complaints.

Ms. Holmes and Balwani falsely claimed to investors that its portable blood analyzers were deployed by the Department of Defense in the war theater in Afghanistan and on medevac helicopters and that Theranos would generate more than $100 million in revenues in 2014, the SEC said in its complaints. In fact, the company’s revenues were a little more than $100,000 that year.

Meanwhile, Hillary and Little Miss Lean In waned to be seen with Holmes. She was on the cover of every major finance magazine an invited to all the glam events.

At home she had to be laughing her ass off. She KNEW what she did was no good. She got investors to pony up millions. She rode the Lean In and I’m With Her game until it all fell apart. I gotta say I give her credit for such a well-played farce. Of course, the downside is she has no money. Her investors lost money. People who paid for the blood analyzer and got hoodwinked aren’t happy but I still think this is a lesson to be learned – the media is so quick to elevate a woman to High Priestess because she’s a woman and not bother to delve into the actual workings of her company or product.

They all fell for her, hook, lime and sinker.

9 thoughts on “Knock Knock. Who’s There? SEC. SEC Who? Uh Oh.

  1. Elizabeth Holmes. The first person in history to go from a net worth of $8 billion to $0 virtually overnight. The WSJ series of articles on this company which kicked this hornet’s nest so hard the SEC couldn’t ignore it was well done and humorous as well. Well worth the read if anyone missed it.

    1. Forget the orange jumpsuit, unfortunately. Her slap on the wrist, per the WSJ, is a $500,000 fine and being barred from serving as an officer or director of any public company for 10 years. Under terms of the settlement she and Theranos were not required either to admit or deny any wrongdoing even though regulators alleged they raised more than $700 million from investors while deceiving them about the capabilities of the company’s technology.

      1. Her lack of real punishment says to me they were afraid to punish a woman who had so many powerful friends who might scream sexism. She should be in jail and those investors out to sue the pants off her. Literally.

  2. This SEC civil penalty is unbelievable to me. To get this slap on the wrist for such a large scale fraud is incredible. One can only hope the US Atty in SF does a better job on the criminal side. What is even sadder is the number of lives impacted by making health decisions based on the results of their phony tests. I’m very surprised that some class action guys haven’t followed that avenue.

    As a side note, you should read the story of Tyler Schultz and what happened to him after he decided to blow the whistle on Theranos. His own grandfather turned against him (yes that George Schultz).

    1. Totally agree but it goes back to Holmes being the media darling. She was the poster girl for everything and so many people fell for her line I’m sure they felt she didn’t rally deserve to be punished. Double standards.

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