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Comment by jjxw | Hacker News Reader

The author of this book, John Carreyou, was apparently public enemy number 1 at Theranos. Theranos both dedicated time at an all hands to chant "f--- you Carreyou" and developed a space invaders like game where players could shoot pictures of his head.[0] It does put some of the more... unflattering descriptions of Balwani in the article in context. For someone who was so viciously attacked and ultimately vindicated on his bearish view of the Theranos it's understandable.

[0]http://www.businessinsider.com/theranos-employees-made-space...

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FWIW, Carreyrou's unflattering descriptions of Balwani are well-supported by on-the-record interviews of people in the book. It's not clear in the posted excerpt (I don't think Carreyrou ever stated this in his reports for WSJ), but Balwani was also Holmes's boyfriend, so many people had opinions about him even outside his official role at Theranos.

> Balwani was also Holmes's boyfriend

How did I miss that so far? That explains a lot, thank you for that factoid.

Skimming over the excerpt (I haven't gotten that far in the book), it seems to be omitted, which makes sense given that the excerpt focuses on the company's corporate dysfunction. I have to admire Carreyrou's and his WSJ editors' restraint in not reporting such a salacious detail during the course of their Theranos investigation, because a case could be made that Holmes's and Balwani's relationship is germane to how Theranos turned out.

> In early August 2007, Ed accompanied Elizabeth to Nashville. Sunny picked them up from the office in his Porsche and drove them to the airport. It was the first time Ed met him in person. The extent of their age gap suddenly became apparent. Sunny looked to be in his early forties, nearly twenty years older than Elizabeth. There was also a cold, businesslike dynamic to their relationship. When they parted at the airport, Sunny didn’t say “Goodbye” or “Have a nice trip.” Instead, he barked, “Now go make some money!”

Or maybe, perhaps the damning evidence against Theranos was so voluminous that the Holmes+Balwani relationship was small potatoes in comparison and not worth the newsprint.

edit: The WSJ recently published an excerpt of the book's chapter devoted to Balwani. Here's the Twitter link (WSJ paywall seems to let in twitter.com referral domain): https://twitter.com/JohnCarreyrou/status/997522528301174784

Wow. The WSJ article puts the history of the company and the motivations of the founder in an entirely new light.

I wonder why it wasn't common knowledge before.

That's one very sick corporate culture.

I sincerely hope that all the high level cadre at Theranos will find it hard to get new employment. That sort of thing has absolutely no place in any organization.

Er, shouldn't they outright go to prison?

Under what crimes would you like them charged? What proof do you have to support the charges?

I agree that Theranos is a terrible company and that in a just world and with perfect evidence the execs should be punished heavily but in this world I'd be most impressed if they were just fined into the poorhouse.

There is some hope though, the last paragraph reads:

"Meanwhile, the U.S. attorney’s office in San Francisco is conducting a criminal investigation that could result in indictments of both Holmes and Balwani."

But I would not hold my breath.

Now, if they had committed a real crime, such as copyright violation then that would be a different matter. But mere fraud and potentially impacting the health of consumers? Let's not make a fuss.

Are you joking?

>Under what crimes would you like them charged?

Fraud, obviously.

>What proof do you have to support the charges?

They took investor money and made deals with partners like Walgreens based on a product that didn't work as claimed. Either it was an outright deception and they knew they were hawking bullshit, or they sincerely believed they could eventually deliver what they were promising, but in any case they lied to those investors and partners.

But of course they will never go to jail as any of us would for this massive and blatant fraud, jail is for the little people.

The problem with investors claiming fraud is that they would have to prove that they did proper due diligence and that is where the whole thing falls down. All Holmes & Co have to do is to claim that they thought it would work and that if there was a critical flaw they only became aware of it long after the investment was made. It is very hard for investors to recover anything from start-ups that fail and it is very hard to prove fraud when it might just as well be self-delusion.

I don't doubt for a moment that it was fraud but proving that is another matter entirely.

> The problem with investors claiming fraud is that they would have to prove that they did proper due diligence and that is where the whole thing falls down.

That may be an issue for civil fraud complaints by investors, but it has no bearing on any action by the government for criminal fraud, and this subthread was about crimes for which they should be imprisoned, not torts for which they should pay damages.

Ah yes, good point, I totally mixed up the civil/criminal parts of this. Well, here's to hoping.

> All Holmes & Co have to do is to claim that they thought it would work and that if there was a critical flaw they only became aware of it long after the investment was made.

you probably missed (it was just on radio) how Holmes & Co showcased their tech by conspicuously loading samples into the machine and then leading the audience away while rushing the samples to Siemens hardware and presenting the results from it like it was produced by their own machine. Basically investors got a slew of hands of a birthday magician for 400M (though for that kind of money i think even Houdini would rise from the dead to do the show in your backyard)

Oh wow, that's another level entirely. I was not aware of this juicy detail either (see elsewhere in this thread for another whopper). That's more than just a little shady.

Though 'fake it until you make it' gets thrown around all the time here.

Sleight of hand

https://en.wikipedia.org/wiki/Sleight_of_hand

> Under what crimes would you like them charged?

Medicare and securities fraud. If employees there knew of the deception and followed orders to further it, that could be illegal. Furthermore, for employees who sold shares on the secondary market while aware of the deception, that, too, could be illegal.

At the very least, this merits close investigation.

> At the very least, this merits close investigation.

That we agree on. But proving fraud will be very hard, and the investors themselves have a lot of egg on their face in terms of lack of due diligence. In fact, they claimed at some point that they did do their due diligence and Theranos came up all roses.

FOMO is a powerful hypnotic. I've seen it in action a couple of times and it is very interesting how otherwise rational people suddenly let go of all their reserve.

A lot of victims of pretty much any fraud were stupid and greedy, it doesn't mean the fraud was not a crime.

Securities fraud is the easy one to get them on but knowingly putting people’s health at risk is the moral atrocity.

I'm pretty sure that at UBeam they are following this with some anxiety.

Still, the investors that sued (who got back ~half of their investment) only have themselves to blame.

The part that I think they should go to jail for is the health aspect. That's something you don't mess around with on any level.

> Under what crimes would you like them charged?

They apparently (based on statements from employees involved) falsified FDA filings under direct pressure from executive management, so, good old 18 USC § 1001 [0], the catch-all crime of lying to any federal agency about anything within it's scope of concern that usually gets trotted out as a reason never to speak to federal law enforcement without the advice of counsel would seem among the more probably potential charges.

[0] https://www.law.cornell.edu/uscode/text/18/1001

Per the article, there is in fact an ongoing federal criminal investigation. So, that's still on the table.

Unfortunately, it’s unlikely that any of the “high level cadre” really need to find employment. These people are likely already set for life. Whatever fines they might face aren’t going to put them in the poor house, and employability is not something they really need to give much thought to.

> That sort of thing has absolutely no place in any organization.

That's kind of funny. Many (most?) organizations are exactly like that: willing to break the law in order to get ahead. There would be no Uber and no AirBnb otherwise; there wouldn't even be a Microsoft, either. And those are the most visible and prominent firms.

I worked at a big consulting firm in the 90s, the corporate culture there and then was total indifference to laws, regulations, morals or even common sense. The only thing that mattered was billable hours.

Granted, those companies don't deal with people's health, and it's normal to feel outraged and compassionate towards patients who were put in harm's way by the deceiving tactics and outright lies of Theranos' officials.

But let's not forget this happens everywhere -- laws are meaningless if they're not aggressively enforced: if people simply followed the law there would be no need for law enforcement.

> Granted, those companies don't deal with people's health

This sentence of yours called to mind a counter-example:

Two companies traditionally in the "business consulting" trade, Atos and Capita, were tasked by the British Department of Work and Pensions with investigating the "fitness for work" of millions of British welfare recipients. Driven by expectations and probably bonuses for producing the desired outcome, they erred overwhelmingly on the side of "fit." A few of their "fit for work" examinees were undergoing intensive care in a hospital, at least one died on the day following the assessment. Apparently the assessment crew didn't even have a single licensed physician on board.

So here we had two typical "bean counter" outfits acting in a way that tragically worsened quality of life for many infirm and/or poor people.

That seems pretty telling.

If this guy is so far off the mark... then you'll just prove him wrong eventually and what better "f you" is there than that?

If you have to go and have all hands chant like that... I gotta think that guy struck a very real nerve... and he may be right.

Is there any precedence for a multi-time Pulitzer prize winner to be, basically, a self-serving asshole who throws his subjects under the bus for the story?

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