Theranos founder and CEO Elizabeth Holmes has been on a wild roller coaster ride the last few years, hitting very high highs and extremely low lows.
And there could be more damage to her reputation on the way, according to John Carreyrou, the Wall Street Journal investigative reporter who was one of the first journalists to uncover Theranos’ fraudulent nature.
He points out the ongoing criminal investigation into her and her company could yield more indictments.
“I think the charges would be securities fraud and lying to federal officials,” said Carreyrou. And that could lead to a trial.
Earlier this week, the Securities and Exchange Commission charged Holmes and former Theranos President Ramesh “Sunny” Balwani with “massive fraud,” alleging they misled investors and patients with “exaggerated or...false statements about the company’s technology, business, and financial performance.”
It all started in 2013, when Theranos started offering blood tests at select Walgreens around the country. The company claimed it had invented a way to perform more than 250 tests with just a few drops of blood, which would revolutionize the healthcare industry.
By 2014, the company began to crescendo. It caught the attention of investors like Rupert Murdoch and current Secretary of Education Betsy DeVos. Its value ballooned to $9 billion, and with half the equity, Holmes became the youngest self-made female billionaire in the world. She was on the cover of Forbes and Fortune and was touted by some as the next Steve Jobs.
Then reports like Carreyrou’s found that Theranos technology didn’t actually work, bringing its upward trajectory to a screeching halt.
Perhaps hidden by the sheen of glossy magazine covers and the flood of investor cash, the company was bringing in revenues of just $100,000. According to SEC charges, Holmes and Balwani told investors sales hit $100 *million* in 2014.
And Carreyrou says that wasn’t the worst problem. Last year, after conducting millions of blood tests, the company was forced to void or correct most of the results it sent back to patients.
“That’s the most egregious part of this fraud -- gambling with people’s lives,” he said.
Holmes settled with the SEC, paying a $500,000 fine, handing over million of shares of her stock in Theranos, and agreeing not to serve on any public company board for 10 years. Balwani has not reached an agreement.
But to many, Holmes’ punishment was just a “slap on the wrist.” Carreyrou pointed out that she’s still CEO of the company.
“It’s remarkable...I don’t know if there’s been a precedent in the history of American capitalism,” he said.
How was Holmes able to pull off such a feat?
“I think she is a young woman who had enormous ambition, who had a vision, and she pursued that vision,” suggested Carreyrou. “Come 2009, 2010, as this gold rush built in Silicon Valley, she stopped listening to sound advice, she started cutting corners.”
Carreyrou added that Holmes was dating Balwani, who was 19 years her senior, and he turned out to be a bad influence on her.
“At that point I think she crossed the red line.”
Carreyrou is also the author of “Bad Blood: Secrets and Lies in a Silicon Valley Startup,” which takes a deep look at the scandal. The book comes out in October this year.
For full interview, [click here](https://cheddar.com/videos/behind-the-bad-blood-at-theranos).
A big-screen adaptation of the anime “Chainsaw Man” has topped the North American box office, beating a Springsteen biopic and “Black Phone 2.” The movie earned $17.25 million in the U.S. and Canada this weekend. “Black Phone 2” fell to second place with $13 million. Two new releases, the rom-com “Regretting You” and “Springsteen — Deliver Me From Nowhere,” earned $12.85 million and $9.1 million, respectively. “Chainsaw Man – The Movie: Reze Arc” is based on the manga series about a demon hunter. It's another win for Sony-owned Crunchyroll, which also released a “Demon Slayer” film last month that debuted to a record $70 million.
The Federal Aviation Administration says flights departing for Los Angeles International Airport were halted briefly due to a staffing shortage at a Southern California air traffic facility. The FAA issued a temporary ground stop at one of the world’s busiest airports on Sunday morning soon after U.S. Transportation Secretary Sean Duffy predicted that travelers would see more flights delayed as the nation’s air traffic controllers work without pay during the federal government shutdown. The hold on planes taking off for LAX lasted an hour and 45 minutes and didn't appear to cause continued problems. The FAA said staffing shortages also delayed planes headed to Washington, Chicago and Newark, New Jersey on Sunday.
Boeing workers at three Midwest plants where military aircraft and weapons are developed have voted to reject the company’s latest contract offer and to continue a strike that started almost three months ago. The strike by about 3,200 machinists at the plants in the Missouri cities of St. Louis and St. Charles, and in Mascoutah, Illinois, is smaller in scale than a walkout last year by 33,000 Boeing workers who assemble commercial jetliners. The president of the International Association of Machinists says Sunday's outcome shows Boeing hasn't adequately addressed wages and retirement benefits. Boeing says Sunday's vote was close with 51% of union members opposing the revised offer.
The stunning indictment that led to the arrest of more than 30 people — including Miami Heat guard Terry Rozier and other NBA figures — has drawn new scrutiny of the booming business of sports betting in the U.S. The multibillion-dollar industry has made it easy for sports fans — and even some players — to wager on everything from the outcome of games to that of a single play with just a few taps of a cellphone. But regulating the rapidly-growing industry has proven to be a challenge. Professional sports leagues’ own role in promoting gambling has also raised eyebrows.
Tesla, the car company run by Elon Musk, reported Wednesday that it sold more vehicles in the past three months after boycotts hit hard earlier this year, but profits still fell sharply. Third-quarter earnings fell to $1.4 billion, from $2.2 billion a year earlier. Excluding charges, per share profit of 50 cents came in below analysts' estimate. Tesla shares fell 3.5% in after-hours trading. Musk said the company's robotaxi service, which is available in Austin, Texas, and San Francisco, will roll out to as many as 10 other metro areas by the end of the year.
Starbucks’ AI barista aims to speed service and improve experience. Nick Lichtenberg, Fortune Business Editor, explains its impact on workers and customers.
As Big Tech reports Q3 earnings, investors await proof that massive AI and cloud investments from Meta, Apple, Microsoft, and Alphabet are driving real growth.
Eric Trump joins us to discuss American Bitcoin’s mission, market strategy, and why he believes the U.S. must lead the next era of digital currency innovation.
