endobj >> 217 0 obj endobj 15 0 obj /K 10 << << 239 0 obj 188 0 R null null null 189 0 R null null null 190 0 R null 373 0 obj /K 6 /Rotate 0 /K 18 /K 8 /S /LBody >> endobj /MediaBox [0 0 612 792] << /K 18 /K 37 /P 314 0 R 360 0 obj /S /LI /K 153 0 R And at least one employee told the financial newspaper Theranos executivesdid not report test results that would have caused concerns about the machines accuracy. /Pg 258 0 R /Lang (EN-US) 80 0 obj /K 10 /Parent 5 0 R 84 0 obj /S /LI /P 48 0 R endobj << /Lang (EN-US) /K 214 0 R 44 0 obj /Tabs /S /MediaBox [0 0 612 792] endobj >> /S /LI /S /LI /Pg 253 0 R /ITXT (2.1.7) endobj 19 0 obj /P 271 0 R /StructParents 6 endobj << >> /K 166 0 R The Securities and Exchange Commission also brought civil fraud charges against Holmes and Balwani. This is how Theranos's huge valuation was birthed and where a critical legal problem lies. /K 35 394 0 obj /K 3 /K 27 endobj /P 48 0 R << << /K 6 endobj /CropBox [0 0 612 792] /K 18 /S /LBody /Contents [425 0 R 426 0 R 427 0 R] /Resources 496 0 R /Pg 235 0 R /Lang (EN-US) Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. << /P 55 0 R /Rotate 0 endobj /Pg 257 0 R >> /Pg 235 0 R /S /LI /K [26 384 0 R] endobj endobj >> /S /LBody << /K 33 78 0 obj << In the end, the innovations Theranos was after were not only meant for its own success but to secure a better future for millions of people. /S /LBody /S /P /S /LBody /Annots [] Holmes, Balwani, and Theranos also made false or misleading statements to investors about many aspects of Theranos' business, including the capabilities of its proprietary 8 0 obj /Resources 460 0 R /P 8 0 R /ParentTree 9 0 R /S /LBody >> /Lang (EN-US) /P 8 0 R 381 0 obj /S /LBody endobj 185 0 obj >> /P 8 0 R /K 49 >> /S /LBody /S /LBody >> /P 50 0 R 236 0 obj /Pg 241 0 R /Annots [] In 2013, things had "started to get a bit tight," Yam said. << (REUTERS/Carlo Allegri). /S /P endobj /Resources 456 0 R endobj endobj During the trial Holmes accused her ex-boyfriend and business partner, Ramesh "Sunny" Balwani, of emotional and sexual abuse at the time of the alleged crimes, impairing her mental state. endobj << 191 0 obj These detailed accounts show a pattern of behaviors consistent with a distorted motivational and cognitive state. /P 8 0 R /Pg 243 0 R Connor Radnovich/The Chronicle. /K 213 0 R /Lang (EN-US) Indication(s) for use: Same as the intended use 3. << 110 0 obj After all, one of Theranos top achievements was the very idea Holmes herself had developed an idea she never put through the rigor of scientific testing before defining its contours. 14 0 obj /S /LI /S /LBody << /P 51 0 R /P 371 0 R endobj 4 [null null 131 0 R null null null 132 0 R null null null /Pg 243 0 R 357 0 obj /S /LI /K 18 What we know for certain is that behind this particular corporate failure lies a cautionary tale of boundless visioning that all investors, entrepreneurs and organizations seeking breakthrough innovations should be interested in further understanding. Tech workers are using company mission statements to hold their CEOs accountable. That innovation combined with the use of technology to build a somewhat bulkier though still miniature and portable yet more reliable version of the micro-Lab would have provided plenty of opportunity to make strides towards the dream of empowering people with reliable, timely and inexpensive blood testing. endobj 308 0 obj null null 121 0 R null null null 122 0 R null null null >> /Pg 239 0 R However, any sentence following conviction would be imposed by the court after consideration of the U.S. Claim This Company. /S /LBody /S /LI >> >> /Pg 237 0 R >> >> /P 370 0 R << >> /S /P >> >> 169 0 obj endobj The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely. /Parent 14 0 R >> << >> >> /S /LBody >> /K 134 0 R >> /P 278 0 R /Lang (EN-US) 85 0 obj /P 51 0 R The Indictment Alleges That Investors Were Defrauded. /Rotate 0 endobj Theranos founder Elizabeth Holmes arrives at San Jose court over alleged fraud. >> /S /LBody 304 0 obj >> 32 0 obj About us Our mission is to make actionable information accessible to everyone at the time it matters. /S /LBody /K 18 /P 8 0 R /P 297 0 R /K 18 endobj endobj /Lang (EN-US) The fact that key stakeholders at Safeway remained upbeat despite the arrogant and secretive behaviors of Theranos executives and the lack of any real hard proof associated with many of the claims Theranos was making is extremely revealing. /Pg 241 0 R /P 40 0 R /K 19 endobj endobj endobj /Pg 239 0 R endobj 55 0 R 56 0 R 57 0 R 58 0 R 59 0 R 60 0 R 61 0 R 62 0 R 63 0 R 64 0 R endobj 218 0 obj /S /TD endobj 98 0 obj /K 5 >> /K 184 0 R /K [26 388 0 R] << /Rotate 0 >> /Pg 239 0 R 233 0 obj << /P 352 0 R endobj 7 [null null 147 0 R null null null 148 0 R null null null /S /LI Attorneys Jeff Schenk, Robert S. Leach, and John C. Bostic are prosecuting the case with the assistance of Laurie Worthen and Bridget Kilkenny. 278 0 obj >> /S /LBody 273 0 obj /Pg 238 0 R 168 0 obj /S /LI /K 202 0 R /P 50 0 R /P 348 0 R /Count 24 /Annots [] Elizabeth Holmes finished testifying in wire fraud trial. >> /Lang (EN-US) /S /TR /P 290 0 R endobj Theranos founder Elizabeth Holmes arrives at San Jose court over alleged fraud. >> /Pg 248 0 R 12 0 obj The indictment describes a number of schemes that defendants allegedly employed to mislead investors, doctors, and patients. /S /LI << 185 0 R null null] /StructParents 1 << /S /P University Mission Statement. Heinz and Kraft Foods. /K 119 0 R 117 0 R null null null 118 0 R null null] . This conspiracy misled doctors and patients about the reliability of medical tests that endangered health and lives.. endobj 142 0 obj 302 0 obj 156 0 obj << /Type /Page /K [26 397 0 R] /P 8 0 R endobj /S /P /Rotate 0 /S /Sect /Pg 252 0 R 93 0 obj << >> /Tabs /S endobj /Lang (EN-US) Theranos founder Elizabeth Holmes arrives at San Jose court, Theranos CEO on companys blood testing system. /K [10 392 0 R] 2 0 obj 16 [null null 199 0 R null null null 200 0 R null null null >> Theranos CEO Elizabeth Holmes on her company and the landscape of U.S. diagnostic-lab industry. /MediaBox [0 0 612 792] /Rotate 0 << << << 3480 Use of and/or registration on any portion of this site constitutes acceptance of our User Agreement (updated 1/1/20) and Privacy Policy and Cookie Statement (updated 1/1/20) and Ars Technica Addendum (effective 8/21/2018). /K 197 0 R endobj /Type /MCR endobj /P 8 0 R 374 0 obj 93 0 R] Further, defendants allegedly represented to investors that Theranos had a profitable and revenue-generating business relationship with the United States Department of Defense and that Theranoss technology had deployed to the battlefield when, in truth, Theranos had limited revenue from military contracts and its technology was not deployed in the battlefield. endobj /K 6 154 0 obj 190 0 obj endobj /CropBox [0 0 612 792] The indictment alleges that the defendants used a combination of direct communications, marketing materials, statements to the media, financial statements, models, and other information to defraud potential investors. << >> /Pg 235 0 R /K 22 << /S /LBody 230 0 obj 311 0 obj >> null 114 0 R null] /K 5 << endobj endobj /StructParents 9 /P 50 0 R /P 326 0 R endobj endobj /Tabs /S /Parent 12 0 R /Lang (EN-US) /Parent 14 0 R 1343. << /P 380 0 R 170 0 obj /P 59 0 R << The company spent over $150,000 surveilling her and another whistleblower. She had a charisma to her; she was very articulate,Cheung saidof Holmes. /P 8 0 R (Photo by Kristoffer Tripplaar/AP). >> 324 0 R 325 0 R 326 0 R 327 0 R 328 0 R 329 0 R 330 0 R] endobj 291 0 obj 242 0 obj 22 [70 0 R 71 0 R 72 0 R 73 0 R 74 0 R 75 0 R 76 0 R 77 0 R 78 0 R 79 0 R The Associated Press contributed to this report. >> 221 0 obj endobj Holmes fostered a culture of fear because it served her needs. Theranos Mission Statement. /P 8 0 R /S /LBody >> /K 161 0 R 393 0 obj << 275 0 obj << 318 0 obj << Theranos founder Elizabeth Holmes, now a mother of two,is asking to delay her11-year sentence for felony fraud so she can be at home with her two young children while she appeals theconviction. /P 48 0 R /Pg 255 0 R /Contents [497 0 R 498 0 R 499 0 R] /Contents [437 0 R 438 0 R 439 0 R] The startup entrepreneurial spirit is selling a vision of a fictional product - a product that does not yet exist. /Pg 240 0 R 113 0 obj /P 295 0 R /Parent 5 0 R /S /LI >> endobj 341 0 R 342 0 R 343 0 R 344 0 R 345 0 R 346 0 R 347 0 R 348 0 R] endobj << 335 0 obj . /Pg 235 0 R /Type /Page 121 0 obj >> endobj /StructParents 19 >> endobj << Many of those statements were outright falsehoods or, more charitably, danced around the truth. 33 0 obj /S /LI /Rotate 0 /S /LBody /K [22 386 0 R] endobj /S /LBody Elizabeth Holmes is the founder and former CEO of Theranos (2003-2018), a company that created and distributed blood testing devices. !xRnE1$g9`8\\5g1^"z+. endstream /K 18 /P 48 0 R Theranos is a private health care and life sciences company with the stated mission to revolutionize medical laboratory testing through allegedly innovative methods for drawing blood, testing blood, and interpreting the resulting patient data. << 296 0 obj A young (age-defying), pure-looking (evil-defying), masculine-sounding (stereotype-defying) female CEO speaking about Theranos unfulfilled feats in the present or past present tense, Holmes proposition was so enticing that she was able to assemble one of the most impressive boards in corporate America. /P 50 0 R /S /LI /P 353 0 R endobj According to the indictment, the defendants also allegedly made numerous misrepresentations to potential investors about Theranoss financial condition and its future prospects. /Contents [489 0 R 490 0 R 491 0 R] >> /Pg 235 0 R << /S /LI >> /Lang (EN-US) << endobj /K 28 /MediaBox [0 0 612 792] endobj /Lang (EN-US) endobj endobj /StructParents 16 /Type /Page << /Pg 235 0 R null null 152 0 R null null] /P 40 0 R >> 244 0 obj << 197 0 obj /Lang (EN-US) /Pg 236 0 R Opinions expressed by Forbes Contributors are their own. The conduct alleged in these charges erodes public trust in the safety and effectiveness of medical products, including diagnostics. 343 0 obj 3 0 obj /MCID 2 /Tabs /S /K 13 Ms Holmes faces 12 fraud charges over her . >> /P 8 0 R 287 0 obj /Lang (EN-US) << /Lang (EN-US) << The Company's clinical laboratory offers comprehensive laboratory tests. /S /LI The alleged fraud, which Holmes perpetrated as the companys founder and CEO, may have felt less onerous due to the goodness of the vision and mission she championed. /P 281 0 R /P 8 0 R null 24 0 R 25 0 R 26 0 R 27 0 R 28 0 R 29 0 R 30 0 R 31 0 R 32 0 R /Pg 258 0 R endobj endobj If convicted, they could each face maximum penalties of 20 years in prisona $2.75 million fine and possiblyrestitution, the Department of Justice said. /K 168 0 R /Lang (EN-US) /K 180 0 R << /Lang (EN-US) In addition, the defendants represented to investors that Theranos would soon dramatically increase the number of Wellness Centers within Walgreens stores when, in truth, Holmes and Balwani knew by late 2014 that Theranoss retail Walgreens rollout had stalled because of several issues, including that Walgreenss executives had concerns with Theranoss performance. << endobj /S /LI << endobj 314 0 R 315 0 R 316 0 R 317 0 R 318 0 R 319 0 R 320 0 R 321 0 R 322 0 R 323 0 R >> /S /LI endobj << /P 59 0 R null] Four Blind Spots at the Core of Theranos' Failure. endobj /Lang (EN-US) /K 25 /K 18 /K 148 0 R /P 8 0 R 253 0 obj None of the information on this page has been provided or approved by Theranos. /S /P endobj /P 40 0 R 29 0 obj /StructParents 17 >> 124 0 obj /P 51 0 R /Pg 252 0 R /Pg 242 0 R endobj /MediaBox [0 0 612 792] /Type /Page /S /LI endobj /Parent 11 0 R /P 8 0 R The employees at Morgan Stanley earn an average yearly salary of $103,933 per year, and the salaries at National Journal average $73,533 per year. The defendants are charged with two counts of conspiracy to commit wire fraud and nine counts of wire fraud. << >> /S /LI /Type /Page /S /LI /P 381 0 R >> /TextBox /Art >> /P 8 0 R 309 0 obj /P 48 0 R << /Parent 11 0 R << null null 142 0 R null null null 143 0 R null null] But indictments said Holmes andher colleague and former romantic partner Ramesh Sunny Balwani, lied about the technology, the company's finances, and its partnerships with the Department of Defense and Walgreens. /S /LI >> A sign outside of the headquarters of Theranos in Palo Alto, California on January 24, 2016. >> endobj For example, with respect to investors, defendants performed technology demonstrations during which defendants intended to cause potential investors to believe blood tests were being conducted on Theranoss proprietary analyzer when, in fact, the analyzer really was running a null protocol and was not testing the potential investors blood. /Type /Page /K 4 15 [null null 192 0 R null null null 193 0 R null null null >> /P 55 0 R /S /LI >> << << << /P 260 0 R /Lang (EN-US) /CropBox [0 0 612 792] /Lang (EN-US) /K 24 /Pg 254 0 R 1. /Lang (EN-US) /Rotate 0 endobj /K 198 0 R << /Annots [] /S /P >> << The mission statement of Theranos is stated as, "To make actionable information accessible to everyone at the time that it matters". /MediaBox [0 0 612 792] /Lang (EN-US) /S /LI /S /LI /Lang (EN-US) Theranos' mission is to make actionable information accessible to everyone at the time it matters most. /P 389 0 R endobj >> << /Footnote /Note 312 0 obj 101 0 obj /P 285 0 R /K [18 385 0 R] /P 34 0 R 11 [null null 169 0 R null null null 170 0 R null null null /S /P /P 380 0 R >> Theranos is a now-defunct healthcare technologystartup founded by disgraced Stanford drop-out Elizabeth Holmes. 367 0 obj /K 8 0 R /K 193 0 R << /K [380 0 R 381 0 R] endobj /P 367 0 R /Lang (EN-US) << endobj There is no try', stolen from . WIRED Media Group /S /LBody Next to a perfectly dosed narrative of black turtlenecks, sprawling office facilities, glossy paper spreads and alluring marketing campaigns, the supposed Apple look-alike of the health technology industry tantalized investors and consumers with its mission, to facilitate the early detection and prevention of disease and empower people everywhere to live their best possible lives. Its no surprise that many bought into it. 361 0 obj endobj endobj /Strikeout /Span /Nums [0 [15 0 R 16 0 R 17 0 R 18 0 R 19 0 R 20 0 R 21 0 R 22 0 R 23 0 R 94 0 R /S /P /Lang (EN-US) << Ars may earn compensation on sales from links on this site. Carreyous account of Safeways engagement with Theranos is powerful. 40 0 obj /P 8 0 R << << >> 77 0 obj /Pg 258 0 R /Pg 238 0 R /K 2 /P 380 0 R /Lang (EN-US) Despite persistent losses, Holmes salary increased from $200,000 to $400,000, Yam said. /P 357 0 R /S /LBody Mutual Fund and . >> Theranos's mission statement is "To facilitate the early detection and prevention of disease and empower people everywhere to live their best possible lives.". 184 0 obj >> >> /P 51 0 R /Lang (EN-US) >> << /K 2 /P 358 0 R 5 [null null 137 0 R null null null 138 0 R null null null endobj /K 181 0 R 3. << 134 0 obj 149 0 obj endobj endobj /StructParents 2 /S /LBody /K 20 >> >> >> /P 380 0 R << << /Pg 235 0 R >> endobj CNMN Collection endobj /K 156 0 R Ad Choices, Theranos founder Elizabeth Holmes on trial as jury selection begins, Theranos downfall due to elaborate $4M conspiracy, investor says. << /Pg 250 0 R /Lang (EN-US) >> << /S /LI /K 165 0 R /S /LI Follow Mike Snider on Twitter:@mikesnider. /Lang (EN-US) 211 0 R null null null 212 0 R null null null 213 0 R null Initially she funded Real-Time Cures with her co. /S /LI /S /LBody /Type /MCR /Pg 257 0 R << null 49 0 R null null 157 0 R null null] << /StructParents 18 /S /LBody 279 0 obj The Securities and Exchange Commission today charged Silicon Valley-based private company Theranos Inc., its founder and CEO Elizabeth Holmes, and its former President Ramesh "Sunny" Balwani with raising more than $700 million from investors through an elaborate, years-long fraud in which they exaggerated or made false statements about the company's technology, business, and financial . /Pg 245 0 R endobj In addition, the defendants delivered to doctors and patients blood results that were inaccurate, unreliable, and improperly validated. 116 0 obj endobj << /Type /Page endobj endobj /S /LBody FAQ - New Privacy Policy. Theranos was a private health care company, with a mission to revolutionize lab testing through innovative methods for drawing blood, testing blood, and interpreting resulting patient data. >> /Lang (EN-US) /Contents [453 0 R 454 0 R 455 0 R] >> >> /K 157 0 R >> Legal Statement. /Lang (EN-US) 52 0 obj << /S /P At times during that period, Balwani worked in several capacities including as a member of the companys board of directors, as its president, and as its chief operating officer. /P 8 0 R endobj >> /S /P << 147 0 obj 182 0 obj /S /P /Lang (EN-US) Around the time that Theranos was losing nearly $2 million per week, investors in the blood-testing startup were being told that the company would soon be bringing in almost $1 billion per year. /Type /MCR 337 0 obj /S /LBody /Pg 240 0 R /Lang (EN-US) 123 0 R null null null 124 0 R null null] /Resources 420 0 R /Lang (EN-US) >> This is why accounts about Theranos willingness to circumvent FDA rules and requirements, among other things, or legitimate due diligence requests made by potential clients is disconcerting yet unsurprising. endobj /S /LBody endobj /K 22 227 0 R null null null 228 0 R null null] Before sharing sensitive information, make sure you're on a federal government site. /Lang (EN-US) /Lang (EN-US) /Lang (EN-US) /Lang (EN-US) /Lang (EN-US) Theranos founder and CEO Elizabeth Holmes speaks at the Fortune Global Forum in San Francisco, California, on Monday, Nov. 2, 2015. /K 261 0 R >> >> << >> /Lang (EN-US) endobj >> << endobj /P 272 0 R /Pg 250 0 R >> endobj stream /K 163 0 R /P 51 0 R << >> /K 136 0 R endobj 315 0 obj endobj /S /LBody /S /P << /Pg 256 0 R 74 0 obj /K 12 /K 21 5 0 obj /S /LBody /Pg 235 0 R /K [15 0 R 16 0 R 17 0 R 18 0 R 19 0 R 20 0 R 21 0 R 22 0 R 23 0 R 24 0 R 332 0 obj 268 0 obj /Tabs /S . /Pg 256 0 R << /Lang (EN-US) endobj /P 55 0 R Theranos employees are most likely to be members of the Democratic Party. She already settled with the Securities and Exchange Commission (SEC) for a $500,000 penalty and 10-year ban on serving as an officer or director of a public company. /Lang (EN-US) 364 0 R 365 0 R 366 0 R 367 0 R] /Type /Page /P 301 0 R >> << /Parent 13 0 R Theranos is a private health care and life sciences company with the stated mission to revolutionize medical laboratory testing through allegedly innovative methods for drawing blood, testing . /Rotate 0 endobj << /Pg 235 0 R /P 40 0 R Its not uncommon for startups to lose money in their early years, and its not entirely unusual for the fastest burn rate to happen right before things turn around. /P 345 0 R << The matter was assigned to the Honorable Lucy H. Koh, U.S. District Judge, for further proceedings. /Pg 249 0 R /P 50 0 R /Pg 239 0 R /P 296 0 R The defendants knew Theranos was not capable of consistently producing accurate and reliable results for certain blood tests, including the tests for calcium, chloride, potassium, bicarbonate, HIV, Hba1C, hCG, and sodium. /P 8 0 R /Pg 246 0 R /Type /Catalog 202 0 obj /S /LBody endobj endobj /P 55 0 R /Resources 416 0 R << /K 2 /S /LI /S /LBody endobj /S /P /Lang (EN-US) /Parent 14 0 R 333 0 obj /Resources 492 0 R endobj /P 8 0 R /P 50 0 R /P 8 0 R It's unclear . /S /LI Theranos' mission: a blood test requiring only a pinprick of blood, enough to run dozens of medical tests on the startup's hi-tech machines. /S /P /P 332 0 R Theranos went on to issue private stock in six rounds between 2014 and 2015, starting at 17 cents per share and ending at $17 per share, according to a document explained by Yam, with investors . /Lang (EN-US) /K 143 0 R endobj /Lang (EN-US) >> 355 0 obj /Type /MCR The company grew to become a business worth billions. /P 8 0 R /S /P endobj /K 215 0 R /K 10 << 105 0 R 106 0 R 107 0 R 108 0 R 109 0 R 35 0 R 36 0 R 37 0 R 38 0 R null