In the case that tested the limits of the “fake it till you make it” approach to a startup business, on January 3, 2022, a jury in the U.S. District Court for the Northern District of California convicted Elizabeth Holmes, founder and former CEO of now-defunct Theranos Inc., on one count of conspiracy to commit wire fraud and three counts of wire fraud against Theranos investors. Each count carries a maximum sentence of 20 years in prison. The jury failed to reach a verdict on three additional counts of wire fraud against Theranos investors and found Holmes not guilty on the multiple counts of conspiracy and wire fraud against Theranos patients.
The trial, which lasted for 14 weeks, called into question more than just Holmes’ questionable business practices and investment solicitation; it was arguably a referendum on “fake it till you make it” practices, such as intentionally overstating, and thereby misrepresenting, a fledgling company’s current capabilities, success, or profitability, while banking on the notion that its aspirations will eventually follow the desired trajectory and become a reality. The case also highlighted the importance of investors doing adequate due diligence.
Holmes was accused of defrauding investors by falsely touting that she had created technology capable of performing an expansive suite of blood tests on a tiny fraction of the blood required for traditional diagnostic testing, at significantly reduced cost, so that “fewer people have to say...
(The Center Square) – A Minnesota court has ordered a man to pay nearly $2.5 million in damages, penalties and legal fees after a jury found he submitted nearly 100,000 fraudulent reimbursement cl...