Elizabeth Holmes' Theranos Fraud Case
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Overview
Elizabeth Holmes' Theranos Fraud Case refers to an ongoing controversy regarding Elizabeth Holmes, the founder and former CEO of Theranos, a medical technology company. In 2018, the United States Securities and Exchange Commission charged Holmes with massive fraud for making false claims to investors of blood analysis devices. She has settled some of the charges but pleaded not guilty to others.
Background
In 2003, Elizabeth Holmes founded Theranos, a medical technology company that claimed to have devised a machine that could run hundreds of blood analysis tests in seconds from just a drop of blood.[1] Over the next decade, the company continued to claim that it was working on a device that could run over 1,000 tests from just a drop of blood, generating support from wealthy and power investors such as former U.S. Secretary of State and National Security Advisor Henry Kissinger and former Secretary of Defense General James Mattis.[2] However, following a 2015 Wall Street Journal exposé, many began to question whether Theranos actually had and/or used the technology they purported.[3][4]
On March 14th, 2018, the SEC charged Holmes and former Theranos president Ramesh "Sunny" Balwani with "massive fraud." The complaint charges them with "deceiving investors by making it appear as if Theranos had successfully developed a commercially-ready portable blood analyzer" why performing these tests on "commercial analyzers that were manufactured by others."
Steven Peikin, the SEC’s co-director of enforcement, said, "We allege that after years of development, Theranos was able to process just a small number of blood tests upon its proprietary analyzer, and instead conducted the vast majority of its patients’ tests on modified commercial analyzers that were manufactured by others."
On June 15th, 2018, Holmes and Balwani were indicted on federal wire fraud charges. [5]
On September 4th, the company shut down, ceasing production and laying off all staff members.
Developments
Holmes' Response
In March, Holmes settled the allegations, agreeing to pay the SEC a $500,000 fine and to return the money to investors. Additionally, Holmes forfeited 19 million shares of stock and has been barred from taking a company leadership role for 10 years.
She has pleaded not guilty to the wire fraud charges.[6]
Online Reaction
The charges against Holmes and Theranos became a popular topic of conversation on the website Reddit. On January 24th, 2019, Redditor[7] tfresca posted a video from ABC entitled "Ex-Theranos CEO Elizabeth Holmes says 'I don't know' 600-plus times in never-before-broadcast deposition tapes." The post received more than 33,000 points (94% upvoted) and 2,800 comments in less than four months. The story was also discussed in the /r/The_Donald, [8] /r/IAmA, [9] /r/Documentaries[10] and more.
On March 1st, 2019, the YouTube channel ColdFusion published the video "Theranos – Silicon Valley’s Greatest Disaster." The post received more than 1 million views in less than one month (shown below).
The Inventor: Out for Blood in Silicon Valley
On January 24th, 2019, HBO premiered the film The Inventor: Out for Blood in Silicon Valley, a documentary about Holmes and Theranos (trailer below).
The film received mostly positive reviews from critics. On the movie review aggregator website Rotten Tomatoes, [11] the film received a fresh rating of 74% (based on 34 reviews). In their critical consensus, the site wrote, "Alex Gibey's The Inventor declines to outright condemn the actions by Theranos founder Elizabeth Holmes, but instead provides a comprehensive overview of the scandal that allows viewers to mull over its implications towards the broader Silicon Valley."
Bitcoin Tie
Following the film's release, many online joked about Theranos investor Tim Draper's tie, which featured numerous Bitcoin logos on the front design (examples below).
Elizabeth Holmes' Voice
Online, many have mocked Elizabeth Holmes' voice as sounding bizarre and unnaturally low. On March 18th, 2019, YouTuber Alex Corn uploaded a video titled "Elizabeth Holmes (of Thernaos) Real Voice," which featured clips of Holmes talking, making the claim she was faking the sound of her voice (shown below).
That day, comedian Ingrid Ostby uploaded a comedy sketch in which she impersonates Holmes (shown below). Over the next four days, the video gained over 396,000 views and 7,700 likes.
here’s some footage they left out of the inventor HBO doc about how Elizabeth Holmes adopted her now-infamous proven-fake voice pic.twitter.com/l8nPhhYCoP
— Ingrid Ostby (@ingridostby) March 19, 2019
On March 20th, the Busy Tonight YouTube channel uploaded a video in which host Busy Philipps impersonates Holmes (shown below).
Meanwhile, Twitter user Tavi Gevinson tweeted a video of herself impersonating Holmes (shown below). Within 48 hours, the video accumulated upwards of 500,000 views, 10,500 likes and 1,200 retweets.
💉💉💉 pic.twitter.com/N57yAk7pr9
— Tavi Gevinson (@tavitulle) March 20, 2019
Search Interest
External References
[2] CNBC – Secretary DeVos, Walmart heirs and other investors reportedly lost over $600 million on Theranos
[3] Wall Street Journal – Hot Startup Theranos Has Struggled With Its Blood-Test Technology
[4] New York Times – Theranos Under Federal Criminal Investigation, Adding to Its Woes
[5] Justice.gov – Theranos Founder and Former Chief Operating Officer Charged In Alleged Wire Fraud Schemes
[6] New York Times – Theranos Founder Elizabeth Holmes Indicted on Fraud Charges
[7] Reddit – Ex-Theranos CEO Elizabeth Holmes says 'I don't know' 600+ times in never-before-broadcast deposition tapes
[8] Reddit – Female CEO of Theranos gets a slap on the wrist for defrauding investors while Martin Shkreli goes to prison. Silicon Valley pussy pass at its finest
[9] Reddit – I'm John Carreyrou, author of Bad Blood, the book about the Theranos scandal. Ask me anything.
[10] Reddit – Theranos – Silicon Valley’s Greatest Failure (2019) – What seemed like one of the most ground breaking companies of the 21st century ended up being one of Silicon Valley's greatest failures. How did Elizabeth Holmes manage to fool the world?
[11] Rotten Tomatoes – The Inventor
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