We've seen our share of scams and Ponzi schemes. Bernie Madoff, Martin Shkreli, Jordan Belfort (Wolf of Wall Street), and so many more. Now we have another one of these scams. We have Theranos, this startup that deceived so many.
In 2003, Elizabeth Holmes dropped out of Stanford to revolutionize blood testing. Apparently, her company created a method where just a small pin-prick amount of blood could be used for hundreds of tests. Sounds pretty easy and revolutionary right? Well, it's all fake. For years, her and her partner Ramesh Balwani, as well as the whole company, misled investors with fake data and amplified results. Thus, there really was no regulation
Furthermore, they never let others investigate their practices and facilities and prevented peer review. How did they do that? Well, they found a loophole. So you have the FDA that regulates and improves lab instruments. Then you have the CMS that regulates clinical laboratories. Theranos used the third category, the no-man's land, where laboratory-developed tests are created by labs and their own methods. Furthermore, they modified third-party machinery to use in their tests. They told investors that regulatory approval for its technology was voluntary when it actually wasn't.
For years, outlets like The Wall Street Journal have been trying to investigate the company despite widespread intimidation as recounted by journalist John Carreyrou, who really brought the investigation to the spotlight and helped with the downfall of Theranos. So while he was trying to tackle this giant, this giant Theranos drew in some familiar faces, many important people like Henry Kissinger, Sam Nunn, Stanford professors. These board members helped establish Theranos's validity.
In his book, Bad Blood, Carreyrou explains about this massive fraud and how it started to unravel in 2015. Since then, Theranos has stopped focusing on its blood tests, and even tried to partner with Walgreens. That worked out for a while, as Walgreens was also in need of a new way to earn money.
At its zenith, Theranos was worth $9-10 billion, and now, a woman who revolutionized the biotech-healthcare world has dropped from one of the "most influential people", an "under 30 doer", a "40 under 40", and more, to one of the "world's most disappointing leaders". Such a shame. And now, the SEC has charged her with fraud. So who knows how bad it will turn out. She's already been fined half a million and is barred from holding positions in public companies for the next 10 years.
https://www.cbsnews.com/news/the-theranos-elizabeth-holmes-deception/
https://www.mercurynews.com/2018/05/25/bad-blood-the-unraveling-of-theranos-and-elizabeth-holmes/
https://www.msn.com/en-us/news/us/bad-blood-explores-the-culture-inside-disgraced-startup-theranos/ar-AAxAz7F
http://money.cnn.com/2018/03/14/technology/theranos-fraud-scandal/index.html
http://www.businessinsider.com/john-carreyrou-how-theranos-deceived-silicon-valley-startup-bad-blood-sample-technology-2018-5
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