U.S. Files Criminal Charges Against Elizabeth Holmes and Ramesh Balwani [WSJ]

Dated Jun 15, 2018; last modified on Thu, 02 Sep 2021

(Ask HN) Holmes has 200 Patents. If tech didn't work, why not noticed? https://news.ycombinator.com/item?id=17328664 . Jun 18, 2018.
Theranos Lessons. Morgan Housel. https://www.collaborativefund.com/blog/theranos-lessons/ . Jun 19, 2019.

Holmes and COO charged with wire fraud. Why risk it?

Corporations budget for corporate fines. Executives don’t have any skin in the game.

Unless they inconvenience other wealthy people. Exhibit A: Martin Shkreli. Exhibit B: Wells Fargo.

Why didn’t anyone notice in the early stages?

The impenetrable shield: our breakthrough tech is a trade secret.

People associate red flags with their own lack of understanding. By definition, breakthrough tech hasn’t existed before, so we might have to rely on social proof.

The innovator isn’t neutral. Intelligent non-experts tend to overestimate their prowess. Maybe Holmes believed that she could make it work.

Indicators like patents may be inaccurate. Holmes has ~200 patents.

But she falsely put her name as first author, even when other people like Ian Gibbons did the work.

Holmes had bigwigs in her board: former Secretaries of State, Secretary of Defense, National Security Adviser, Senators.

Theranos also had reputable (and expensive) lawyers working for them. Employees who got out were served with lawsuit threats. On a personal scale, why risk being a hero when you’ll most likely lose? Tyler Schultz, the confidential informant for John Carreyrou, incurred $400k on attorney fees .