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Elizabeth Holmes representing herself in Arizona civil case (mercurynews.com)
193 points by fortran77 66 days ago | hide | past | web | favorite | 164 comments

She’s spending her money on the criminal case to keep her out of jail. She is 100% going to file for bankruptcy so she doesn’t care about the civil case.

Filing for bankruptcy solely with the intent to stop litigation is grounds for the dismissal of the bankruptcy. She’d need to demonstrate that her distress is mostly defined by action other than the litigation—also, costs with respect to the criminal case probably can’t be used to justify bankruptcy.

But does that same rule prevent bankruptcy after getting a final judgement.

She's going to get hit with a 200 million dollar judgement. But she doesn't have 200 million dollars. I assume, at that point, she can declare bankruptcy.

Well it can be paid over time. There are other convicted scammers with giant restitution amounts that they just keep paying until they die.

You obviously can't discharge criminal restitution in bankruptcy. You can discharge civil judgements in most cases, but intentional fraud can be non-dischargable if the creditor files a adversary proceeding.

I guess if they won the criminal case they would have a much better chance of arguing to the bankruptcy court that it wasn't intentional fraud.

Does it matter? Either she spends all her money to get out of jail and ends up penniless or she spends all her money on the civil case and ends up both penniless and in prison. The court can order her to pay up all they want, but you can't squeeze blood out of a stone.

I see what you did there...

Better to be dirt poor with courts judgements than be dirt poor with judgments--and a 20 year jail sentence.

Either way she is broke and even if she has 50 lawyers in the civil case, she might still lose. So she's playing it smart.

So, here's what I sincerely don't get: why is she allowed to spend a bunch of money on her criminal defense while there are civil cases working their way through the courts, and after she's basically admitted she doesn't have enough money to defend herself in both cases?

I understand it would be probably unconstitutional to delay criminal proceedings until after the civil proceedings. But can't the judge in the civil proceedings do something to prevent all the money from being spent on her criminal defense?

It seems morally wrong that someone can commit fraud and then spend the money obtained via that fraud defending themselves against the state before having to settle up with the people who they defrauded.

> "commit fraud"

This technically hasn't been proven yet, that's what the criminal trial is for. If you take away that assumption, then what would be your argument?

People are allowed to allocate their money however they want. You can say that she's committing another fraud, but that would be yet another case. Maybe there's an injunction that can be filed but I doubt there's enough precedent for it.

> If you take away that assumption, then what would be your argument?

The argument is that the civil and criminal proceedings are considering largely similar statements of fact. The burden of proof is lower in the civil case, of course, but the facts under consideration are the same. Or course, slightly different exact statements are being considered but with a substantively similar underlying truth claim: theranos was a fraud. The real point is, it's hard to believe she would ever win the criminal proceedings and lose the civil proceedings.

To me, it would make sense for the courts to insist that the civil proceeding is resolved first when the criminal proceeding is considering largely the same statements of fact but with a higher burden of proof. Why? Because the people the criminal code is supposed to be protecting are largely the same people who are suing, and those folks would probably prefer getting some money back.

The problem is that this would probably violate the sixth amendment (as is mentioned in my initial post). So, again, constitutionally, I understand why. This just seems like a bug rather than a feature.

So, this isn't about "innocent until proven guilty". This is about "speedy trial". I think one possibility, moving forward, is the following workflow:

1. Federal prosecutors communicate intent to prosecute, and provide a list of victims purportedly effected

2. Any effected victims may file civil suits

2a. Judges/congress/state legislative bodies exempt commitments to defense funds for future possible criminal cases from bankruptcy

3. civil cases resolved

4. criminal charges filed and proceedings begin

We test the limits of every amendment that applies to non-corporate-executives, so why not the sixth in fraud proceedings against C suites as well?

They're completely separate cases with different courts, rules, judges, and penalties. Neither has jurisdiction over the other. Having "the courts insist that the civil proceeding is resolved first" is not a choice for either of them to make. This firewall between criminal and civil isn't a "bug", it's a fundamental part of the justice system.

What is a "future possible criminal case"? Why would there be another criminal case? And if there was, what does this court have to do with it?

You're still presuming she's guilty because there's no grounds for interfering with an innocent person's finances that may affect their ability to defend themselves in court or acting on a case based on the assumed outcome of a different one.

The right to a speedy trial is a right of the defendant they can choose to waive, for example if they know they're guilty and want to delay sentencing and punishment for as long as possible.

You have provided a very complex solution that would have to be applied to all cases to address a very rare scenario.

> morally wrong that someone can commit fraud

Prior to being convicted, she is innocent. Hard to use that as a justification to kneecap her ability to defend herself because you already believe she will eventually be found guilty.

Her creditors and the plaintiffs in the civil case could file a motion to freeze her assets. I don't know whether they have attempted to do so.

If they could, and if it beneficial to them, it's safe to bet that they have filed. Unless it's Cousin Vinny LLP

because then people could potentially sue others to sabotage a criminal defense. I'm not sure to what extent her finances are monitored by law enforcement and the various judges.

Upvoted to counterbalance the downvotes for what I perceive as a legit question

Oh, pretty much every single comment I make gets at least one immediate downvote as soon as I post.

I assume I got in a flamewar with the wrong person some years back or something.

Don't really care about internet points on VC-sponsored forums, but it'd be nice to get an answer to this question from someone who knows something about law, though, so thanks :)

It seems like bot(s) that is/are attempting to prevent other users from getting the ability to downvote/500 points. Flaw with hn and disincentive to post here.

Perhaps this sort of unfounded conspiracy theorizing simply attracts legitimate downvotes.

Perhaps, alhtough "person who you get an an argument with intermittently downvotes you posts" isn't exactly a "conspiracy theory". It's just a thing that does happen in internet communities, and that anyone who has moderated one has experience mediating.

But, it's best to be certain! To ensure my downvotes are truly deserved: my bet is on the temporarily embarrassed millionaires taking offense to the last sentence of my prior post ;-) (i.e., /s :) )

I hop you're right, I've been taking that very personal!

Does a bankruptcy eliminate a civil judgement? Why wouldn't everyone file and wipe out their civil case debt then? Seems too easy of a workaround.

The answer is "it depends."

11 USC §1328 and 11 USC §523(a) lists several categories of debt that can't be discharged. (I'm not sure when only the subset listed under §1328 applies).

Criminal fines are definitely not erased by bankruptcy. Civil judgements owed to any government agency (including fines) are also definitely not erased. As is anything connected to willful injury (NB: I don't know the scope of 'injury' here, it may be limited to direct physical or other medical injury, or it could mean destruction of property and the like). And anything obtained by fraud isn't erased. Also things like alimony can't be discharged.

Would Holmes's debts incurred by the Theranos suits be dischargeable... I don't know.

Bankruptcy can discharge most judgements, but you actually have to be bankrupt. If you have $190 million and have a judgement against you of $200 million, you don't get to file bankruptcy and discharge the whole thing because you can't pay the full amount. You'll end up paying most of the judgement before you are actually bankrupt and can discharge the remaining amount.

Caveat: Some assets are protected during bankruptcy proceedings, 401ks federally, IRAs in most states, primary residence up to unlimited value in Florida.

Not legal advice: if you’re going bankrupt with flush 401ks, IRAs, and a luxury residence, Florida is not a bad state to do it in.

Which is why many pro athletes move their residency to Florida the day they sign their multi-million dollar contracts and buy the biggest mansions they can afford.

That's the bonus. No state income tax of FL is your primary residence.

Are pro athletes prone to bankruptcy?

A civil judgment is to take someone’s assets, which the creditor can still do in bankruptcy. It’s not to make someone the creditor’s permanent slave. As far as I know, only spousal support can do that.

In the US, federal student loans are also not dischargeable through bankruptcy.

https://www.npr.org/2020/01/22/797330613/myth-busted-turns-o... (Myth Busted: Turns Out Bankruptcy Can Wipe Out Student Loan Debt After All)

> Just this month, a federal judge in New York discharged more than $220,000 in student loans for a borrower. In her ruling, Chief Bankruptcy Judge Cecelia Morris criticized the fact that even many lawyers "believe it impossible to discharge student loans." She added, "This Court will not participate in perpetuating these myths."

Ruling: https://assets.documentcloud.org/documents/6660178/Rosenberg...

Bankruptcy is not an easy matter.

> One factor in considering whether the U.S. Trustee can prevail in a challenge to the debtor's Chapter 7 filing is whether the debtor can otherwise afford to repay some or all of his debts out of disposable income in the five year time frame provided by Chapter 13. If so, then the U.S. Trustee may succeed in preventing the debtor from receiving a discharge under Chapter 7, effectively forcing the debtor into Chapter 13. https://en.wikipedia.org/wiki/Chapter_7,_Title_11,_United_St...

You really don't want to give a Federal officer the power to decide you have too much disposable income for the next five years.

> Does a bankruptcy eliminate a civil judgement?

It depends.

In the Holmes case, the plaintiff, if they win, will probably argue that at least part of the settlement should be nondischargeable because Holmes committed fraud.

> Why wouldn't everyone file and wipe out their civil case debt then?

Because either:

1) the courts explicitly disallow it in the particular case; or,

2) the combination of non-exempt assets and continued access to credit is more valuable than the settlement amount (in this case, you would end up paying the entire amount during bankruptcy proceedings in any case anyways, and then have a black mark on your credit for no good reason).

> Why wouldn't everyone file and wipe out their civil case debt then?

Because bankruptcy involves losing your unsecured assets and adverse credit. The same reason not everyone declares assets to erase their dischargeable debts that aren't civil judgements.

Doesn’t that make perfect sense though?

More so when you realize she just married a millionaire hotel heir who won’t be liable for her wife’s debts because they were incurred before the marriage...

It's strange how someone supposedly intelligent like Billy Evans can be so stupid. As a spouse, Elizabeth Holmes comes with tremendous baggage regardless of the outcome of the court cases. And — not to be crude — she isn't even particularly attractive. I guess I just don't understand the ways of billionaires?

I bet she is very energizing/encouraging/inspiring to be around, which is a good quality in a partner. On the other hand, so is honesty...

Has she ditched The Voice? Perhaps that got him attracted. She is intelligent, too. Which is potentially attractive.

As for physically attractive: lots of make up isn't, to me. She seems tall. I don't fancy blondes. Ie. also matter of taste.

Former family friend Richard Fuisz said she was a fair student with poor grades. All indications I've seen are that she isn't intelligent but happens to be a sociopath who worked wealthy connections.

Above-average intelligence*.

I’m sure he paid top dollar for that prenup — and worth every penny.

She's a proven extremely competent swindler. It's probably a mistake to assume she can't possibly have convinced someone a pre-nup isn't necessary.

I would imagine his family would condition his inheritance on a prenup, at least under circumstances such as these.

I think you're confused about how a prenup works in regards to the current context

Nope, a prenup could cover issues arising during the marriage, in addition to at dissolution. It is critical that she not have rights during the marriage to his separate property because then it could be taken by creditors.

And also, as mentioned below, she is obviously not super trustworthy!

No, he means you're confused about the need for a pre nup. Creditors do not have rights to the separate assets of a spouse for pre material debts even without a pre nup.

Sure, but assets can be commingled, and I would think one would want to have a very clear understanding of what would and wouldn't be commingled, and what happens to earnings during the marriage (which would be community property in CA).

You're still not getting it...

Premarital assets of one spouse are not subject to the premarital debts of the other spouse. Period. For actions like this arising before the marriage but concluding after the marriage, the debt is premarital.

The same is true of one spouse's separate assets, such as an inheritance.

Marital debts can be subject to marital assets, regardless of whether you have a prenup or not, but even most community property states generally treat legal settlements as debt of the incurring spouse rather than as marital debt. And even the ones that don't will usually allocate that debt to the incurring spouse in the event of a divorce.

Yeah, I don't think you're getting what I'm saying either.

My point is that this is a very untrustworthy person who is currently being sued and will likely be sued again, marrying a person who is super wealthy. This is clearly a situation where an ironclad prenup is warranted.

As to the specific legal/financial implications: if she continues to lie about things in her civil or criminal trials, she could end up incurring further liabilities — during the marriage — that could put marital property at risk. Or she could defraud other people, again putting marital property at risk. It would be a good idea to cordon off as much as possible to keep it from being attachable by her current/future creditors.

But honestly, I have no idea why anyone would take issue with my original comment: The dude needed a prenup, he probably paid a lot, and it was probably worth it. Why pick nits?

And I say this as a (former) lawyer, who appreciates nuance and getting things right.

But his assets would be protected for all of this, by default, because she (allegedly) committed all of these crimes prior to the marriage.

I think he is making insinuations as to her wiles.

What this article (but not others) fails to mention is that these lawyers are some of the best-paid in Silicon Valley: Cooley LLP. I know an acquisition where Cooley walked away with more than any employee. Cooley isn’t going to be missing much.

I’m surprised Cooley would even take her as a client given the criminal case and her net worth versus the liabilities. I would have thought they’re dump her years ago. “Lawyers getting stiffed” is a pretty biased headline. “Vultures discover empty carcass is actually empty” is more accurate.

David Boies [1] represented Microsoft in Microsoft vs. United States (USG won), SCO vs IBM (IBM won), he represented Harvey Weinstein, and he represented Virginia Roberts Giuffre vs Jeffrey Epstein (suspect committed suicide). He also took part in Bush vs Gore. He represented Oracle in Oracle vs Google (Google won), and he represented tobacco companies.

I'm not sure if he's still part of Theranos legal team (in whatever way) but he surely was in the past.

The point is, lawyers don't always end up standing on the right side of justice. They almost always end up getting on the paid side of the spectrum, though. Especially if they have a nice curriculum.

[1] https://en.wikipedia.org/wiki/David_Boies

To paraphrase a lawyer friend of mine: "you don't represent the man, you don't represent the act, you represent the principle: everyone has a right to legal advice."

That taking morally reprehensible clients often pay well is just icing on the cake.

According to the book Bad Blood about the Theranos debacle (great book), Holmes had Cooley LLP on to deals with the book's author (John Carreyrou) as well as whistleblowers. I guess they had decided to stick around up until now.

> Theranos had been paying the millions-a-month legal bills of Holmes and former company president Sunny Balwani, Vanity Fair reported, citing two former company executives. But a few months after Holmes and Balwani were charged with fraud, the company dissolved, handing all assets and intellectual property over to an investment firm and saying its remaining $5 million in cash would go to unsecured creditors. Lawyers may have received money in advance to represent Holmes before Theranos went belly up, David Ball, a Santa Clara University law professor, has told this news organization.

I remember reading an argument about Bernie Madoff: he'll spend the rest of his life in jail, but nobody can take away the 20 years when he was king of the world.

Holmes got half that. I wonder if they were worth it, or if she spent them dreading being found out.

Bernie Madoff had a family and was found out when he was I believe 70. Holmes is in the prime of her life. Holmes has most of her life to lose, where as Bernie spend the large majority of his living large.

Moreover, Bernie Madoff family all tragically dissolved: both of his sons died (one committed suicide and the other one died of cancer), his wife was stripped of all the life she had built, the rest of family disowned him. He caused distress to many investors and caused lots of devastation that shouldn't be praised and explained. The man acted for himself, out of egoistic tendencies, and that's not something I'd consider as living large.

The maximum sentence the DOJ is asking for in Holmes's case is 20 years. She may well deserve it, (if she caused sick people to die or get sicker) but she'll probably get less. In the worst case (for her) she'd be 55 when she got out of prison. Everyone will have forgotten about her by then. She may think that's the same as being forgiven.

I highly doubt that she’ll serve 20 years. I’d be surprised if she received even 10% of such a sentence and her time served is likely to be a good deal less.

I think deep down it’s not enjoyable to be on top while knowing that there is a very good chance that you will be found out. I think is a very stressful experience.

If you had that kind of guilt and worry, you wouldn't put yourself in that position to begin with. These people don't have the same kind of emotional reaction you and I have. From my experience with people in a similar psychological category, this kind of quasi-fearlessness is viewed as a super power from which the person is able to manipulate those around them to get the outcomes they want. They're not process-oriented people, they're rats in a Skinner box pressing down the lever that gives them their food pellets. If they feel stress, their lack of moral qualms only makes the sensation feel exhilarating, like a roller coaster or an action-packed video game.

These people are not normal

Imagine you defraud someone of 10 million. Then you think 'no, I want more'. I cannot put myself in their shoes, but I would like their shoes to go to jail for a long time.

Financial fraud should be treated like robbery.

1% of people are psychopaths, according to internet surveys. I don't know how accurate they are, but assuming they are in the ballpark, I can imagine Madoff doing all of this and sleep good at night if he lacked all empathy.

See also: The Sword of Damocles, "uneasy lies the head that wears a crown", etc.

I think Holmes thought she could wing it until what they were promising was possible. Not a bad plan, it just ... didn't really work out.

Isn't there a name for the idea that every visionary and every fraudster is basically the same person?

There has to be a parallel universe where Holmes got more money pumped into her company, got regulators to ignore her company despite causing deaths, got away with incredibly shady marketing, purchased bankrupt companies owned by family members against her fiduciary duty, and then - through sheer hype and money spent - managed to produce a viable product or at least advance the technology enough to be a net contribution to humanity.

In this universe, that person is Musk instead of Holmes, but they are fundamentally the same archetype and the same story.

Thomas Edison did this with the incandescent light bulb. He claimed he had it working long before he actually did.

Holmes was doing the same thing. Indeed, she often referenced Edison's quote about having to fail 10,000 times. And named their machine the Edison.

Theranos was paying the salary of ~800 employees. They were trying to make it work (though by all accounts were given an ultimately impossible task). It seems likely she was a true believer and had convinced herself it was possible. Ignoring the problems and base reality. Also having convinced herself that it was for the greater good. "We're going to save lives. No one has to die too young, like my uncle did". In the meantime, pretended that it works. Fake it till you make it.

Elon isn't really doing that though, given the results he's shown many times over. It helps that he's an engineer operating from first principles and has a physics-based mindset. I think the reality bending he does is more in the realm of expectation and time. Hence unrealistic estimates. But they're things that are ultimately doable and tend to get done.

Yes! Exactly! Jobs without Woz.

I wonder what she was really thinking. When I read the book “Bad Blood” I got the impression that she was mainly concerned about covering up and keeping up impressions and wasn’t even involved in the actual technology.

This analysis diminishes certain facts of the Madoff case. Madoff's son killed himself due to stress related to the fallout from the scandal, meanwhile strongly denying involvement the whole time. Moreover, Bernard himself will die in jail.

So in fact, I think the reverse is true: he would trade 100 years of glory to have even a day back with his son. And even if he doesn't have remorse for the scheme itself, I can't imagine he sleeps well knowing that his crimes directly led to his son taking his own life. Maybe I'm ascribing too much humanity to him, but I have to imagine he lives in, or very near to, hell.

Madoff has stated he is happier in jail than he was before he got caught. He was never king of anything. Living a life in which you lie to everyone you meet-your family, children, friends, and clients-is not conducive to happiness. He constantly had to be vigilant about getting caught. His own son turned him in, and later committed suicide. Lying is not selfish, but deeply self-destructive.

But he lied so well, for so long. He wouldn't have gotten as far as he did without knowing how to tell people what they want to hear. And this is what we want to hear. No heart of darkness, just... a mistake. Oops. He promises he won't do it again...

I recall reading that in the prison social hierarchy, Bernie has very high status. His fraud is esteemed as a great achievement.

Well, I don't think anyone in the prison has pulled off a heist as big as his.

The argument would make sense if you let your family secured, while you accepted the trade-off of living like a king for a while, but taking one for the family. Maddoff's family was destroyed and probably will end changing their name. Had he robbed a bank, it would be different, he screwed a lot of people with sad stories.

As for Holmes, she hasn't even started yet.

A life where you’ve never been able to experience what it’s like to be authentic and honest and loved for who you are.

I personally can’t imagine the past to be a comfort for a present where you are so deeply disconnected from your self.

Of course, if you’ve never known it, you might not miss it.

All the fond memories of things I've done in the past don't provide me much comfort when I'm really down in the dumps.

I expect the same holds true for Madoff, Holmes, etc.

I'm not a fan of documentaries, but once this is all over I would definitely watch one on this. She was so young when she started the company, it's hard to believe she intended to defraud people from the start. I can't excuse any harm she caused, but I imagine she just got in over her head and couldn't let it go.

Edit: read some more about the people involved, sounds like it was worse than I thought. Sad :(

I would highly recommend reading the book Bad Blood, which is written by the WSJ journalist who uncovered the fraud. It is very good.

Very good, and also hilarious in parts. I gained a lot of respect for the WSJ's editorial department; Carreyrou was investigating fraud at the same time the WSJ was writing glowing pieces about Elizabeth Holmes as a founder.

Real deep investigative journalism is a beautiful thing when you see it in action. We need to treasure it and fund it. Makes me think it needs to be separate from mainstream media in some way.

It's a shame the words "real", "deep", and "investigative" are needed. Used to just be "journalism".

No, it never did. Journalism has always included simply gathering and publishing fairly superficial news. It doesn't take any investigation to let people know about decisions made at a recent school board meeting, or that the local fair is coming up and Little Tommy will enter his pig in the 'best pet' competition, and it only takes a small amount of investigation to learn that the school board decision was heavily driven by the supervisor's experience in his previous district - but that doesn't make it unimportant, and the reliable recording of basic local facts is incredibly important to those 'deep investigative' journalists.

Precisely why my brain immediately went to, "we need to get this far away from today's media industry..." after feeling the necessity of writing that

> Used to just be "journalism"

Bollocks. Look up the phrase "yellow journalism" and "muckraker". If anything there was more of an incentive to lie like a mofo because, outside of word-of-mouth, the only source of news was a newspaper.

Nowadays you're saturated with data, but you can turn it off, or dig for something that represents an alternative viewpoint. But in 1910 your only source of "truth" was what William Randolph Hearst said it was.

See also: the Spanish-American War, Fatty Arbuckle's trial, and "Rosebud"

And Rupert Murdoch decided to trust his journalists and didn't shut down the investigation despite Holmes's repeated requests even though he had a large personal investment in Theranos.

Not a hard decision his media empire is worth a lot more than losing some money on Theranos. Hardly an act of courage.

His personal investment in Theranos was never going to pan out. Regardless of how he acted w/ his journalists.

So strange given the fact that he owns fox news. I wonder about how he runs these companies.

It's not in an investor's interest to be ignorant about problems with their investment.

That's my question. Is he just avoiding the problem? Is the problem irrelevant to him and he just wants to run a business? Did he create the culture in Fox deliberately?

was investigating fraud at the same time the WSJ was writing glowing pieces about Elizabeth Holmes as a founder.

In Catch & Kill Ronan Farrow is investigating Harvey Weinstein under the noses of NBC executives who are all friends of his and colluding to cover it up. An excellent book.

I thought the author worked for the Journal?

Sorry, you’re right, fixed.

If you enjoyed that you will also enjoy Catch & Kill by Ronan Farrow.

I was thinking something after the fact would have the most information, since the trials should air everything out.

I watched it and it was meh... a lot of information is lacking.

Yes, for people like you and me and fellow HNers. 99% of the world has no clue who Holmes is and that is a good thing.

If you’re a fan of podcast documentaries, I would check out “The Dropout”. It’s really good, and how I first found out about Theranos

Out for Blood already exists and covers 95% of the story (I think HBO has a TV show in the pipeline too).

It was not a great documentary in my book. I'm waiting for a more thorough investigation work.

Everything that will be found out is out there.

I believe they’re making a movie with Jennifer Lawrence playing Holmes.

Yeah, I believe it's supposed to be directed by Adam McKay (The Big Short, Vice, Anchorman, etc.) and the original author of the book is writing the script as well. Could be quite good if done right. I would assume they are waiting for these court cases to have their day, before filming the movie...

I thought McKay's direction on Vice was pretty derivative off of what he had done on Big Short. I hope he takes the Theranos story in a different direction besides framing voiceover, irreverent cutaways to celebrities/pop culture references, and reduction of overall narratives to a good-vs-stupid power struggle.

Welp, there's some more money to be made for Holmes, I would assume from selling her story?

I doubt it. The story is already known through books like Carreyrou's "Bad Blood". If anyone will get paid for the story it would be someone like Carreyrou.

> She was so young when she started the company, it's hard to believe she intended to defraud people from the start.

Why do you think that young people are immune from doing bad things? From all accounts, it seems she was a a sociopath.

Mostly? I'm naive :) I'm young, and it's probably harder for me to picture someone like me doing this kind of thing as opposed to older generations.

Not sure why people are down voting you - based on what's out there she very likely is.

The point is logically disconnected from the question of whether the business plan at age 19 was to sell fake blood tests.

This is the stomping grounds of young, 'soon to be rich' idealouges. The current world is dripping with what people who frequent this site have done wrong today. Sociopath is incorrect. We just no longer care about our peers, because it is fashionable, and Profitable.

Even if someone genuinely is a sociopath, there is an argument to be made that if you are young enough, some portion of that is the fault of your parents.

The older you get, the less sympathy people typically have for blaming your parents/childhood for stuff. But a lot of people are inclined to cut young people some slack based on the idea that something went wrong in their upbringing and they didn't really know better.

The HBO definitely had a strong point of view but it's hard to watch her and not think she's a serious sociopath with no regard for truth or the consequences of her actions.

I fully expect that with her superior intellect that she'll deliver value to her defense the same way she delivered value to her investors and customers.

She'll tell the judge she's doing the work herself, but secretly in the back rooms will be a full team of lawyers doing the actual hoping nobody actually looks behind the curtain while raising VC money to support the case.

There's no real point in defending yourself in a civil trial if you can't afford the legal fees to start with (civil trials don't have criminal penalties -- you'll just pay damages, worst case).

Theory is she probably paid a lump sum for defense for her in criminal trial, which is absolutely the rational thing to do.

Holmes will, best case, come out of this whole saga bankrupt but free. Whether you think this is appropriate punishment for defrauding rich investors is up to you.

yes, there was also over/underdiagnosis in Arizona. That's not the criminal trial though

> Whether you think this is appropriate punishment for defrauding rich investors is up to you.

Since you almost seem to be soliciting an opinion... I think that the investors also bear a huge amount of the blame for not doing enough due diligence and investing in a company that was so incredibly mismanaged and corrupt with cronyism.

Without the ridiculous valuations and lack of oversight by experienced biotech hand, Holmes would never have been enabled to commit the "fraud" which was pretty evident to many outsiders after not much time at all.

That an investigative journalist revealed the deception, rather than the board realizing it and changing course first, is a huge indictment of the investors' position in our economy of being able to make decisions with hundreds of millions of dollars at a go.

Young, female founder, acts like the next Steve Jobs, claimed to have some kind of miracle technology... It was the perfect story. Every investor, board member, and media hack had the X-Files “I want to believe” poster hanging on their wall.

They kind of deserved to get swindled. The patients, not so much...

Has anyone dug through the old HN posts about Theranos? I remember people being highly skeptical. How close were they?

This guy dropped by to lay down the truth: https://news.ycombinator.com/threads?id=medman77

His one and only comment. I wonder who he was.

That’s actually kind of wild. This person nailed it to a T, and as their only comment of all time.

While hindsight is 20/20, most of their stuff he is talking about was visible to see , it is just that because VCs were putting money we all thought they must have done due diligence better than us armchair commentators, same with Wework .

Ultimately until shit hits the fan, everyone would naturally trust the guy backing his belief with cash better than anyone else‘s analysis.

If there was market to short startups perhaps it could be different

The VC I worked with at the time definitely did their due diligence, but it wasn't easy. When Theranos visited their office, they refused to sign an NDA, which immediately made the VCs suspicious. So they sent an employee to Walgreens to get the THeranos test and noticed that it included a full blood draw (when it should have just been the "nanotainer" or whatever). At that point they believed that Theranos was using their competitor's machines to implement the tests beause their tech didn't work yet.

The ones you worked for defn didn’t put money , I am not sure the ones who did put money did any due diligence, if they did and knowingly put money they are no different from homes they were trying scam the next bigger guy then

The comment was made about 4 months after Ian Gibbons committed suicide [1] (which I suppose caught some bad publicity).

[1] https://en.wikipedia.org/wiki/Ian_Gibbons_(biochemist)

Lots of people were saying "Isn't it weird that this company has tonnes of highly connected military men on their board but almost no doctors?"

I know that set alarm bells off -- that the whole board looks like that. It looked like a complete appeal to influence rather than getting board members from companies that supply the military with medical.

The other narrative raising alarms was that she was a woman CEO. It is then a matter of deciding if it is just a success story that the media wants to tell, or a story being pushed for more hype. Once I (and friends/coworkers) looked at it with skepticism, there just wasn't anything of substance there.

I read a doctor saying you can't do that much with that little blood.

I'm not saying I called it. I'm saying someone else called it back then, I believed them and these seemingly unique red flags all played out like the paranoid would believe.

Bold move. Hope she spent the past year or so brushing up on legal knowledge

Not necessarily:

"She told the judge she wouldn’t make any arguments, but would rely on arguments made by lawyers for the other defendants in the case, Bloomberg reported Friday, citing an unnamed lawyer said to be present at the proceedings."

That strikes me as even bolder. Implicit assumption that the argument works for both people. One small diff in circumstances and then she is lawyerless and without a Defence

Would not even require difference in circumstances, seems like the other defendants would be likely to just pin the blame on her if she isn’t going to defend herself.

oh snap. Good point. As evil as it seems that might just work

Bold indeed. ‘Cause not listening to your lawyers worked so well for Ross Ulbright and Hans Reiser...

Prioritizing staying out of prison over civil judgements you can extinguish in bankruptcy. Prudent strategy considering constrained resources.

Disclaimer, personal opinion: Holmes should receive life for her actions in contributing to knowingly providing inaccurate test results people relied on for medical decisions.



She should be able to squeeze enough money out of the other high profile poeople in Theranos for her legal fees so not to spill stuff about them.

Are you suggesting she's blackmailing the others involved in the company? Is there any proof of this?

It’s common for multiple groups to be defendants in the same civil suit. So, any of them can end up paying for the defense of all of them. For example suing the doctor and hospital for a botched surgery.

The other sad thing about this, is that anyone who comes up with a legitimate tech along this line, will probably fail to get funding now

Let this be a lesson of why it's a bad to let growth get ahead of science.

I wonder if she is still using the fake voice in court.


Subverting FDA regulations is the difference.

im sorry, what's your point?

Wow, who could have predicted that Holmes wouldn't pay her bills?

"A man who is his own lawyer has a fool for his client"

Pretty much. Look how not listening to lawyers worked for Ross Ulbright or Hans Reiser. Both suffered from a severe case of Dunning Kruger. Both could have gotten off much lighter had they shut the fuck up and listened to their lawyers...

Only super arrogant people or crazy people are dumb enough to ignore their lawyer or go without.

Holmes is about to learn the limits of what a dewey eyed woman speaking in a fake baritone voice can do.

Hope she spends the rest of her days in prison for her deception.

Did they steal the image captain? Seems a bit dated...

> Elizabeth Holmes dropped out of Stanford in 2003 as a 19-year-old to start Theranos, a company now poised to disrupt the medical diagnostic test market. She spoke about the company’s vision at their headquarters in Palo Alto, Calif., Thursday afternoon July 3, 2014. (Karl Mondon/Bay Area News Group)

Steal from themselves? The caption is just copied from their original story that used that photo.

How is what she did different from all the other silicon valley startups that fail? They get a buttload of money to develop something and then they cannot. From what I've read, most VCs today dont even expect to make their money off of an exit or an IPO, rather from their fees-but that's besides the point.

It’s the intention. Intention is really important in the US legal system; killing someone on purpose is murder but by accident is manslaughter, even if the result is the same. Same goes for finance; failing to do something you intended to do is one thing, but lying to investors and the public that you’re doing it even though you secretly are not is another. And so we punish the second because there was an intent to defraud investors, even if the investors were foolish too.

Because instead of promising to build Uber for toilets and then failing to deliver a profitable company, she did deliver thousands of inaccurate medical test results to innocent people who then potentially made medical decisions based on those test results.

Pets.com didn't get anyone killed. There's an excellent chance that Theranos did.

No chance, at least one person did die: https://en.m.wikipedia.org/wiki/Ian_Gibbons_(biochemist)

Theranos wasn't something that failed to happen because of execution or market trends, it was something that mathematically could not and cannot happen, ever. Also, when that became apparent, the company's response was not to pivot to something else, or to close up shop and return their investors' money; instead, it was to fraudulently claim that this mathematically-impossible process existed, and to sell it.

wow...4 downvotes... the cost of my ignorance

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