The standalone Theranos thread

[WOM]

I guess. The part that will pinch the most is trying to get her next 'big idea' funded, but I've actually no doubt that she will. Given the frequency with which moneyed suckers, etc.

[The Awesome Berbaslug!!!]

how many hundreds of millions of dollars did she steal?

[WOM]

She was once a billionaire. I'd love to know how much is left / stashed.

[Evariste Euler Gauss]

Less than a year? That is insane by any standards considering the serious harm which her fraud has - totally predictably - caused (and I'm not talking about the gullible rich idiot investors of course) and the ruthless determination with which she pursued it. By any standards that would be offensively lenient. But in a country like the US where the criminal justice system is generally so harsh (especially on the poor of course) it would be even more outrageous.

[ursus arctos]

Are you new here?

[The Awesome Berbaslug!!!]

Yes but she stole hundreds of millions from rich people.

[ursus arctos]

That is indeed a key part of the prosecutorial calculus here.

By definition, her victims were “sophisticated investors”.

[Evariste Euler Gauss]

So knowingly endangering life by putting out fake blood tests that led members of the public to make disastrously wrong choices about medical treatment is not a significant part of her wrongdoing in the eyes of US criminal law? it's only the fraudulent taking of investors' money that matters?

[ursus arctos]

There is limited evidence that that actually happened, and if it did it would be a matter for states rather than the federal government.

[Ginger Yellow]

Speaking of spectacular tech frauds:

The Rolls Buildings,
Court 30
Before MR JUSTICE HILDYARD

Tuesday 12 February 2019

At 10:30 AM

Judgment

HC-2015-001324 Autonomy Corporation Limited and others v Lynch and another

[Lucy Waterman]

What are some good pieces to look at for details of this one, GY?

[Ginger Yellow]

Don't know of a single article that summarises it particularly well, but you could just search Alphaville for Autonomy.

[Incandenza]

[Cal Alamein]

For someone who isn’t too abreast of the whole story (me!) I found this to be a decent podcast
http://abcradio.com/podcasts/the-dropout/

[San Bernardhinault]

Well, I've finally finished Bad Blood. I'm no longer as out of my depth on this thread as Elizabeth Holmes was in the tech world...

Holy crap.

It's the details that are great, even better than the big picture. Not just Inca's favourite - the flag that was a veteran of the Afghan wars. But I think my favourite was the creation of an entirely fake lab for Joe Biden to visit.

There are just so many things that it's hard to know what to concentrate on.

Let's start with the fact that George Schultz and Henry Kissinger and James Mattis were all on the board, and all did nothing, as if they weren't Republicans hell bent on the death of regulation and instead were a cautionary tale for the perils of allowing shareholder oversight as a way of preventing corruption.

[San Bernardhinault]

The whole thing reads like a much more expensive, much more damaging sister-piece to the Netflix Fyre documentary as an illustration of something about our times. I wouldn't call it "late-stage capitalism", because capitalism has always been full of vacuousness and corruption.

But I think both reflect that too many people have been suckered into Silicon Valley's myths. A sort of Great Man theory of business, where massive enterprises are created purely by the immense will of the inventor-entrepreneur, even if the whole thing starts off as emperors new clothes. Holmes and McFarland seem to have genuinely believed that if they created a big enough market and demand, that somehow their product would mystically come into being.

They also seem to have bought into the bullshit idea that if you tell someone "Just get it done" often enough that "it" will get done, no matter how complex (or impossible), no matter how ridiculous the timescale, no matter how underresourced. They seem to believe that every employee is a ridiculously hard-working genius (and they believe this because they believe that they are hard-working geniuses, and other people can achieve the same greatness if only they put their mind to it), and this will result in problems being solved.

And I've seen this happen all over. This thinking has escaped into the real world. Everyone in upper-middle management and above, across the world, should be forced to consume these two relics of the modern world so they can learn that it just doesn't work.

[WOM]

Just finished Bad Blood this week. Utterly gripping in every way. One thing I keep wondering: what did those hundreds of employees do all day, every day for years? I mean, there was no 'there' there, but they merrily chewed through hundreds of millions in venture capital, largely for salaries one assumes.

[WOM]

And she's a complete sociopath, of course. I hope she does time behind bars, but I'm not sure that would actually do anything.

[Lucy Waterman]

If there is anything good to come out of this, it is surely the journalistic achievement of Carreyrou’s book. High art.

[Lang Spoon]

I have to read this.

[Incandenza]

It’s so good.

And the flag story. How could someone come up with that idea and do it? How did the people there react when they saw it? No one could have written that if it was fiction, but it perfectly sums up the odd thinking of an executive. Still, I can’t begin to understand the thinking behind it. It haunts me.

[Evariste Euler Gauss]

I think I'm going to have to read this too.

[NHH]

Read in a day - was really pacey but suffered because of the gaps in his story as a result of who would or wouldn't speak with him. The critical thing is the board - e gets some juicy details from some early stuff from their FD, and later a board member who relays concerns to the Chairman about the bullshit being peddled. But that abrubtly stops after the board member resigns, and the narrative ceases. Then there's a jaw dropping moment where they're about to fire her, and she talks the board round. But the story stops there too; there's no sense of what happened next; as her behaviour didn't change in any meaningful sense, why the issue didn't come back to the board is a critical question, and whether there were changes made after that at board level.

But given that according to Carreyfou they didn't have an FD, I mean WTAFF? How the fuck did these dickheads not think at any point in 10 tears to enquire as to who was handling the numbers? Who presented financial reports to the board?

It's this kind of shit that gets completely passed over in these stories; it's interesting to compare with the collapse of the Co-op Bank a few years back, in which various bullshit calumnies were spoken about the calibre of directors and the how the inability to get 'top men' on the board was a fundamental flaw which needed addressing. Yet this kind of things passes without comment; no one calls for an overhaul of board recruitment practices. With private companies, the governance failure is always a bug; with co-ops, it's always a feature.

[ursus arctos]

FDs are not a feature of US boards

The closest thing we have are Audit Committees, but they aren't mandatory for non-listed companies (like Theranos) and are comprised of board members, which is of limited use when the board has been captured.

[Stumpy Pepys]

Just finished Bad Blood this week. Utterly gripping in every way. One thing I keep wondering: what did those hundreds of employees do all day, every day for years? I mean, there was no 'there' there, but they merrily chewed through hundreds of millions in venture capital, largely for salaries one assumes.

Most seemed to be tasked with trying to develop a working product, even if it was scientifically implausible. My impression was that they spent most of the money on the fancy office and, in particular, all the litigation.