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18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
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Elizabeth Holmes Charged with Massive $700 Million Fraud — Gets Slap on Wrist and $500,000 Fine

At one point Theranos was valued at more than $10 billion. Today, the SEC announced they’ve forced her to surrender all 19 million shares in the company she defrauded people with, in addition to — GET THIS — a $500,000 fine. That’s right, ladies and gents, a $500,000 fine.

Oh, she’s also barred from being an officer or director of a publicly traded company for 10 years. So harsh.

The law is an ass.
The law is an ass.
The law is an ass.
The law is an ass.
The law is an ass.

Holmes began to rise to national attention in 2013 when she claimed that Theranos had developed a medical technology that could do what seemed impossible: Its secret machines could run thousands of medical tests using the blood from a tiny finger-prick, and do so quickly and cheaply. Glowing magazine profiles followed, and she talked about making lives better for patients around the world, as well as disrupting a multibillion-dollar industry dominated by giants like Laboratory Corp. of America Holdings and Quest Diagnostics Inc.

Behind the scenes, things were very different.

Holmes had claimed her machines could process 90 percent of the tests performed by standard lab equipment. Those statements won the company an agreement with a national pharmacy chain in 2010 even though the technology was not yet “commercially ready,” according to the SEC. The SEC refers to the pharmacy chain as “Pharmacy A.” In 2013,

Theranos publicly announced a partnership with the drugstore chain Walgreens, which later sued Theranos. The companies eventually settled.

As the roll-out with “Pharmacy A” neared, according to the SEC, Holmes told the company’s engineers to modify standard blood-testing machines to run Theranos’s tests.

She hid that change from the pharmacy executives, conducting demonstrations using Theranos’s machines and leading them on company lab tours without revealing the company was using third-party technology. The pharmacy gave Theranos a $100 million “innovation fee” to help with the expansion.

Atop of the financial fraud committed, after it was revealed the company has perpetrated a medical fraud, risking the lives of thousands, they had to retract or correct tens of thousands of tests.

It was sanctioned by regulators at the Centers for Medicare and Medicaid Services, which banned Holmes from running a lab company for two years. The company let go many of its employees and shut down its consumer-testing operations, and said it would focus on developing its technology.

By the end of 2017, the company was on the “verge of bankruptcy,” according to the SEC. It has since obtained a term loan that will keep it afloat for about a year, the SEC said.

Steven Peikin, the co-director of the SEC’s enforcement division, said the company avoided paying any penalties in part because the misconduct was perpetrated by Holmes and Balwani. A corporate penalty would harm investors who had already been defrauded, he said.

If you’re scratching your head wondering what makes Elizabeth Holmes and Theranos special, look no further than their original board of directors — all well connected men inside of our government.

Source: Forbes

Let’s take a look at Theranos’ 12-person board (which is an 11-man team if you don’t include CEO and Chairwoman Elizabeth Holmes—interesting given her stated commitment to women in STEM). We have former Secretary of State Henry Kissinger, former Secretary of Defense Bill Perry, former Secretary of State George Shultz, former Senators Sam Nunn and Bill Frist (who, it should be noted, is a surgeon), former Navy Admiral Gary Roughead, former Marine Corps General James Mattis, and former CEOs Dick Kovacevich of Wells Fargo and Riley Bechtel of Bechtel. There is also one former epidemiologist—William Foege, and, in addition to Holmes, one current executive, Sunny Balwani, who is Theranos’ president and CEO.

Holmes’ parents have worked inside the US govt their entire lives, mom as a Congressional committee staffer and Dad is a long time government shill for various agencies.

More on Dad.

For almost 25 years he has served in a number of leadership positions with the Department of State and USAID, including as the Principal Deputy Assistant Secretary of State for Refugee Programs, the Acting Director of the Office of Foreign Disaster Assistance and the Director of the US Trade and Development Agency.

Other US Government assignments have included serving as the third ranking officer at the US Environmental Protection Agency, as its Chief Financial Officer and Assistant Administrator for Management.
A graduate of Wesleyan University, Holmes served as a Second Lieutenant for Civil Affairs in the US Army. He received the US Army Soldier’s Medal for Heroism. In addition to his extraordinary service record here in the United States and around the world, he has served Webb for many years as a trustee (1998-2009) and a class agent since 2000.

Holmes resides in Washington, DC with his wife Noel. They have two children: Elizabeth and Christian (a graduate of WSC’s class of ’05).

My sentiments exactly.

The rules are different for some people.

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23 comments

  1. Cricket

    LOL. The listing of the Theranos BoD could be fully paid up members of Bohemian Grove. Wasn’t it Nixon who called it “the most faggy goddamned thing you could ever imagine”?

    I’ll just add:

    The law is an ass.

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  2. infinitezuul

    She hosted several fundraisers for Hillary.

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    • probucks

      America is making it quite clear that white bitches can commit any crime and avoid jail.

      • 1
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      • masteroneass

        Good business model. Invent a scam then hire a hot bitch as CEO. Getting backing by some high level people in government. Skim cash from investors then admit your product didnt actuallybdo jack shit. Im going to make a kit for entrepeneurs on this and pitch it on shit tank for Cuban.

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        • bob smith

          “Hot?” Behind all of that paint, she looks just like Shkreli… or worse, Hillary. UUUGLY!!!

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          • bob smith

            Look up some internet pics. It will make you vomit… if you’re into that…

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      • juice

        even Martha Stewart did some soft time

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  3. natehois

    It helps to look like you’re doing a public good rather than looking like you’re trying to murder AIDs patients. I’m talking high level, here.

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  4. rosenrush

    I told you many, many years ago her company was a fraud. I remember when she was starting and the valuation was in the low hundreds of millions. Totally shady, secretive, couldn’t produce any verification of anything. Funny how people overlook that when you’re a young, attractive (for business) female.

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  5. lesurgeon

    I’m not even going to lie to you, homie.. I’d pick up the $500,00 tab if she let me spread her butt cheeks and hit that.

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    • bob smith

      Trust me… If you saw her up close, you’d start batting for the other team… if you aren’t already.

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  6. one-eighty

    She’s just a girl. If there was a little problem, it probably wasn’t really her fault. She didn’t know what she was doing and some guy led her astray.

    Come on. You know how the world works.

    I remember a case where a woman shot and killed her husband, and she got an extremely light sentence because “he had abused her.” It turned out they had an argument and he yelled at her.

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  7. ironbird

    The tranny did nothing wrong.

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  8. numbersgame

    C’mon guys, is this really political?

    $500k + 19M shares is about $500k + 19m shares more than most corrupt executives get as punishment. Look at how many peopel Wells Fargo screwed. Where’s the perp walk? Oh, right, management didn’t know….

    You can’t compare Shkreli because he was an @sshat and was very public about his right to fuck people over, so he was made a sacraficial goat so that the Federal Goverenment looked like it was actually doing something about high prescription prices.

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  9. fryguy15

    A special song for a special chickenhead

    https://www.youtube.com/watch?v=sI5b0iqROlg

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  10. cancel19

    That THOT Steve Jobs wannabe gotta go to gaol big time, hellava moar than Shkreli! At least Shkreli made money to all his investors. That whore got away with it longer cuz she was giving Henry Kissinger blow jobs.

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  11. sarcrilege

    Aw come on you guys. Just cut this cutie some slack. She has a nice ass, she looks like she’d be good in the sack. So what. It was not even a billion$ fraud and she got fined 1/2 billion. She learned her lesson and wont do it again.

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    • moosh

      Not for 10 whole years she won’t. Insane. I guess the board gets off Scott free because they were obviously oblivious and not pulling any strings

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  12. masteroneass

    Silicon Valley joke of the day. On a side not her net worth is zero and will never have anybody trust her again. It was a flop but tech cant solve all our problems. As a matter of fact I think tech actually makes a lot of things worse. Look at Uber for example. Need more blogs ripping on tech clown from “the valley”. These articles are gems.

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    • Po Pimp

      Never trusted again? Get that shit out of here.

      Sincerely,
      John Meriwether

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  13. awanka

    Some animals are more equal than others, Mr. Fly. Take us piggies for example.

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  14. stockslueth

    Justice is not blind.

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  15. TJWP

    Now give the government all your guns. Trust me it will be OK.

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