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Theranos was a story of greed, grift, and white supremacy
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Triipe
All Star
Everyone place your bets with my friend BillyJoe, he's got the best odds and we got the game fixed. Everyone wants to place a bet with billyJoe, hurry and get your bet in before the opportunity passes....
That's the mentally that Silicon Valley VC's have, it's this impending sense of success that every startup tries to sell to the VC's. More so a story of greed, but you won't catch me feeling sorry for the billionaire investors that got hosed over.
Failing to see the White Supremacy here: Theranos had a Patel running things from what I can tell.
"Hey u wht girl, you run my company. no. yes. yes. verry good"
That's a helluva scheme, but now they're both charged with 700m in Fraud by the SEC
That's the mentally that Silicon Valley VC's have, it's this impending sense of success that every startup tries to sell to the VC's. More so a story of greed, but you won't catch me feeling sorry for the billionaire investors that got hosed over.
Failing to see the White Supremacy here: Theranos had a Patel running things from what I can tell.
"Hey u wht girl, you run my company. no. yes. yes. verry good"
According to the SEC, the pair raised over $700 million from investors on the back of “false statements about the company’s technology, business, and financial performance.”
Holmes and Balwani also falsely claimed that their company’s products were deployed by the U.S. Department of Defense on the battlefield in Afghanistan and on medevac helicopters. Furthermore, they added that Theranos would generate more than $100 million in revenue in 2014.
The truth is that its technology was never deployed in Afghanistan and it generated just over $100,000 in revenue that year.
That's a helluva scheme, but now they're both charged with 700m in Fraud by the SEC
im familiar with labs, long story short.Everyone place your bets with my friend BillyJoe, he's got the best odds and we got the game fixed. Everyone wants to place a bet with billyJoe, hurry and get your bet in before the opportunity passes....
That's the mentally that Silicon Valley VC's have, it's this impending sense of success that every startup tries to sell to the VC's. More so a story of greed, but you won't catch me feeling sorry for the billionaire investors that got hosed over.
Failing to see the White Supremacy here: Theranos had a Patel running things from what I can tell.
"Hey u wht girl, you run my company. no. yes. yes. verry good"
That's a helluva scheme, but now they're both charged with 700m in Fraud by the SEC
This shyt never made sense. Never.
More data from less blood? Huh? That’s borderline homeopathy!
https://www.wsj.com/articles/theranos-inc-s-partners-in-blood-1526662047
Theranos Inc.’s Partners in Blood
Much of the attention to the medical diagnostics firm accused of fraud has focused on CEO Elizabeth Holmes. But behind the scenes, another character played a central role.
John CarreyrouMay 18, 2018 12:47 p.m. ET
Theranos Inc.’s 15-year quest to revolutionize the blood-testing industry met with the latest in a series of crippling blows in March when the Securities and Exchange Commission charged the Silicon Valley diagnostics firm with conducting an “elaborate, years-long fraud.” The SEC accused the firm of deceiving investors into believing that its portable device could perform a broad range of laboratory tests on drops of blood pricked from a finger, when in fact it was doing most of its tests on commercial analyzers made by others.
Much of the attention has focused on Theranos founder Elizabeth Holmes. But another character played a central role behind the scenes in the alleged fraud: Ms. Holmes’s boyfriend, Ramesh “Sunny” Balwani, according to more than three dozen former Theranos employees who interacted with Mr. Balwani extensively over a number of years. Mr. Balwani, who met Ms. Holmes when she was a teenager, jointly ran the company with her for seven years as president and chief operating officer and enforced a corporate culture of secrecy and fear until his departure in the spring of 2016, the former employees say.
Unlike Ms. Holmes and Theranos, who reached a settlement with the SEC to resolve the agency’s civil charges in March without admitting or denying wrongdoing, Mr. Balwani has denied separate charges the SEC filed against him in a parallel action and is fighting them in a California federal court. Ms. Holmes didn’t respond to requests for comment. A spokeswoman for Mr. Balwani provided a statement from his lawyer, Jeffrey B. Coopersmith, saying Mr. Balwani accurately represented Theranos to investors to the best of his ability, worked hard to maximize shareholder value and took on significant risk investing in the company while never benefiting financially from his work.
‘In the 37-year-old Mr. Balwani, the 18-year-old Ms. Holmes saw what she wanted to become: a successful and wealthy entrepreneur. He became her mentor.’
When Mr. Balwani met Ms. Holmes, he already had made a fortune from his role in a technology startup. Born and raised in India, Mr. Balwani first came to the U.S. in 1986 for his undergraduate studies and later worked as a software engineer for Lotus and Microsoft. In 1999, he joined CommerceBid.com as its president and No. 2 executive; it was developing a software program for companies to pit their suppliers against one another for contracts in live online auctions. Business-to-business e-commerce had become hot, and in November 1999, the sector leader—the similarly named Commerce One—acquired the startup for $232 million in cash and stock, though it had just three clients testing its software.
Mr. Balwani received Commerce One shares that he sold for more than $40 million, based on a lawsuit he later filed against an adviser over tax-shelter advice. The deal’s timing couldn’t have been better for the startup’s executives. Within five months, the dot-com bubble had popped and the stock market had swooned. Commerce One eventually filed for bankruptcy.
Not long after cashing in, Mr. Balwani crossed paths with Ms. Holmes in Beijing. In the summer of 2002, both were enrolled in Stanford University’s Mandarin program, which featured several weeks of instruction in China. Ms. Holmes, a month away from starting her undergraduate studies at Stanford, struggled to make friends on the trip and got bullied by some of the other students, according to a description a friend of Ms. Holmes’s mother gave in a legal proceeding. Mr. Balwani, the lone adult among a group of college kids, stepped in and came to her aid, according to this account.
Mr. Balwani, rarely seen in photos, and Ms. Holmes speak to the staff on July 2, 2015, in the cafeteria of Theranos's then-headquarters in Palo Alto. The FDA had just approved one of the company’s fingerstick tests.
In the 37-year-old Mr. Balwani, the 18-year-old Ms. Holmes saw what she wanted to become: a successful and wealthy entrepreneur, according to a friend of Ms. Holmes. He became her mentor, the person who would teach her about business in Silicon Valley. They became romantically involved not long after Ms. Holmes dropped out of Stanford in the fall of 2003, according to the friend and early Theranos employees. When they’d first met in China, Mr. Balwani was married to a Japanese artist and living in San Francisco. By October 2004, he was listed as single on the deed to a condominium he purchased in Palo Alto. Other public records show Ms. Holmes moved into that apartment in July 2005.
When she first incorporated her startup in early 2004, Ms. Holmes wanted to develop a wristband that would simultaneously detect people’s ailments by drawing their blood with microneedles and cure them by injecting them with the appropriate drug. But the TheraPatch, as she called it, proved too futuristic, so she pivoted to a different vision: a portable machine that would perform dozens of laboratory tests from a drop of blood pricked from a patient’s finger.
In Theranos’s early years, Mr. Balwani advised Ms. Holmes but didn’t work at the company, according to early employees. They nonetheless felt his presence behind the scenes, saying it wasn’t unusual for Ms. Holmes to start sentences with “Sunny says.” In September 2009, he joined the company as its second-in-command. Theranos by that time had burned through $47 million it had raised from investors in its first three funding rounds and was on the cusp of bankruptcy. To keep it afloat, Mr. Balwani agreed to personally guarantee a $12 million credit line it took out.
‘Mr. Balwani took to firing people so often that it gave rise to a new expression at the company: to “disappear” someone.’
With some of his own money now at stake, Mr. Balwani wasted no time asserting himself. He frequently barked orders and dressed people down, former employees say. They remember him cutting a brash figure among the scientists and engineers, wearing white designer shirts with puffy sleeves and the top three buttons open, acid-washed jeans and blue Gucci loafers, along with pungent cologne.
He flashed his wealth through his cars, driving a black Lamborghini Gallardo and a black Porsche 911. Both had vanity license plates: The one on the Porsche read “DAZKPTL” in mock reference to Karl Marx’s treatise on capitalism. The Lamborghini’s plate was “VDIVICI,” a play on the phrase “Veni, vidi, vici” (“I came, I saw, I conquered”), which Julius Caesar used to describe his quick victory at the Battle of Zela.
Mr. Balwani took to firing people so often that it gave rise to a new expression at the company: to “disappear” someone. That’s how Theranos employees used the normally intransitive verb when someone was dismissed. “Sunny disappeared him,” they would say.
Wall Street Journal investigative reporter John Carreyrou recounts some of the more unusual experiences he had while uncovering the story of Theranos's business practices.
By the summer of 2013, the Theranos machine had gone through three iterations. The first, a microfluidic device, had been abandoned in 2007. The second, a converted glue-dispensing robot called the Edison, had been shelved in 2010. The third, which Ms. Holmes had christened the miniLab, was supposed to be the one that finally turned her vision into reality. But while she and Mr. Balwani were telling Theranos’s retail partner, Walgreens, that the miniLab could perform the full range of lab tests on tiny finger-stick samples, the truth was that it remained a work in progress, according to the SEC. The list of its problems was lengthy.
The biggest problem of all was the dysfunctional corporate culture in which it was being developed. Ms. Holmes and Mr. Balwani brushed off those who raised concerns or objections as cynics and naysayers. Employees who persisted in doing so were usually marginalized or fired.
While Ms. Holmes was fast to catch on to engineering concepts, Mr. Balwani often appeared out of his depth during those discussions, according to several former Theranos engineers. He had a habit of repeating technical terms he heard others using. During one meeting, he latched onto the term “end effector,” which signifies the claw at the end of a robotic arm. Except Mr. Balwani didn’t hear “end effector”—he heard “endofactor.” For the rest of the meeting, he kept referring to the fictional endofactors. Mr. Balwani’s knowledge of chemistry also was spotty: For instance, he mixed up the chemical symbols for potassium (K) and phosphorus (P), a mistake most high-school chemistry students learn to avoid.
Left, Theranos manufacturing employees at the Newark, Ca., facility making miniLab blood analyzers, which didn’t work as advertised. Right, the company’s proprietary sample collection device. Photo: Theranos, Inc.
Theranos Inc.’s Partners in Blood
Much of the attention to the medical diagnostics firm accused of fraud has focused on CEO Elizabeth Holmes. But behind the scenes, another character played a central role.
John CarreyrouMay 18, 2018 12:47 p.m. ET
Theranos Inc.’s 15-year quest to revolutionize the blood-testing industry met with the latest in a series of crippling blows in March when the Securities and Exchange Commission charged the Silicon Valley diagnostics firm with conducting an “elaborate, years-long fraud.” The SEC accused the firm of deceiving investors into believing that its portable device could perform a broad range of laboratory tests on drops of blood pricked from a finger, when in fact it was doing most of its tests on commercial analyzers made by others.
Much of the attention has focused on Theranos founder Elizabeth Holmes. But another character played a central role behind the scenes in the alleged fraud: Ms. Holmes’s boyfriend, Ramesh “Sunny” Balwani, according to more than three dozen former Theranos employees who interacted with Mr. Balwani extensively over a number of years. Mr. Balwani, who met Ms. Holmes when she was a teenager, jointly ran the company with her for seven years as president and chief operating officer and enforced a corporate culture of secrecy and fear until his departure in the spring of 2016, the former employees say.
Unlike Ms. Holmes and Theranos, who reached a settlement with the SEC to resolve the agency’s civil charges in March without admitting or denying wrongdoing, Mr. Balwani has denied separate charges the SEC filed against him in a parallel action and is fighting them in a California federal court. Ms. Holmes didn’t respond to requests for comment. A spokeswoman for Mr. Balwani provided a statement from his lawyer, Jeffrey B. Coopersmith, saying Mr. Balwani accurately represented Theranos to investors to the best of his ability, worked hard to maximize shareholder value and took on significant risk investing in the company while never benefiting financially from his work.
‘In the 37-year-old Mr. Balwani, the 18-year-old Ms. Holmes saw what she wanted to become: a successful and wealthy entrepreneur. He became her mentor.’
When Mr. Balwani met Ms. Holmes, he already had made a fortune from his role in a technology startup. Born and raised in India, Mr. Balwani first came to the U.S. in 1986 for his undergraduate studies and later worked as a software engineer for Lotus and Microsoft. In 1999, he joined CommerceBid.com as its president and No. 2 executive; it was developing a software program for companies to pit their suppliers against one another for contracts in live online auctions. Business-to-business e-commerce had become hot, and in November 1999, the sector leader—the similarly named Commerce One—acquired the startup for $232 million in cash and stock, though it had just three clients testing its software.
Mr. Balwani received Commerce One shares that he sold for more than $40 million, based on a lawsuit he later filed against an adviser over tax-shelter advice. The deal’s timing couldn’t have been better for the startup’s executives. Within five months, the dot-com bubble had popped and the stock market had swooned. Commerce One eventually filed for bankruptcy.
Not long after cashing in, Mr. Balwani crossed paths with Ms. Holmes in Beijing. In the summer of 2002, both were enrolled in Stanford University’s Mandarin program, which featured several weeks of instruction in China. Ms. Holmes, a month away from starting her undergraduate studies at Stanford, struggled to make friends on the trip and got bullied by some of the other students, according to a description a friend of Ms. Holmes’s mother gave in a legal proceeding. Mr. Balwani, the lone adult among a group of college kids, stepped in and came to her aid, according to this account.
Mr. Balwani, rarely seen in photos, and Ms. Holmes speak to the staff on July 2, 2015, in the cafeteria of Theranos's then-headquarters in Palo Alto. The FDA had just approved one of the company’s fingerstick tests.
In the 37-year-old Mr. Balwani, the 18-year-old Ms. Holmes saw what she wanted to become: a successful and wealthy entrepreneur, according to a friend of Ms. Holmes. He became her mentor, the person who would teach her about business in Silicon Valley. They became romantically involved not long after Ms. Holmes dropped out of Stanford in the fall of 2003, according to the friend and early Theranos employees. When they’d first met in China, Mr. Balwani was married to a Japanese artist and living in San Francisco. By October 2004, he was listed as single on the deed to a condominium he purchased in Palo Alto. Other public records show Ms. Holmes moved into that apartment in July 2005.
When she first incorporated her startup in early 2004, Ms. Holmes wanted to develop a wristband that would simultaneously detect people’s ailments by drawing their blood with microneedles and cure them by injecting them with the appropriate drug. But the TheraPatch, as she called it, proved too futuristic, so she pivoted to a different vision: a portable machine that would perform dozens of laboratory tests from a drop of blood pricked from a patient’s finger.
In Theranos’s early years, Mr. Balwani advised Ms. Holmes but didn’t work at the company, according to early employees. They nonetheless felt his presence behind the scenes, saying it wasn’t unusual for Ms. Holmes to start sentences with “Sunny says.” In September 2009, he joined the company as its second-in-command. Theranos by that time had burned through $47 million it had raised from investors in its first three funding rounds and was on the cusp of bankruptcy. To keep it afloat, Mr. Balwani agreed to personally guarantee a $12 million credit line it took out.
‘Mr. Balwani took to firing people so often that it gave rise to a new expression at the company: to “disappear” someone.’
With some of his own money now at stake, Mr. Balwani wasted no time asserting himself. He frequently barked orders and dressed people down, former employees say. They remember him cutting a brash figure among the scientists and engineers, wearing white designer shirts with puffy sleeves and the top three buttons open, acid-washed jeans and blue Gucci loafers, along with pungent cologne.
He flashed his wealth through his cars, driving a black Lamborghini Gallardo and a black Porsche 911. Both had vanity license plates: The one on the Porsche read “DAZKPTL” in mock reference to Karl Marx’s treatise on capitalism. The Lamborghini’s plate was “VDIVICI,” a play on the phrase “Veni, vidi, vici” (“I came, I saw, I conquered”), which Julius Caesar used to describe his quick victory at the Battle of Zela.
Mr. Balwani took to firing people so often that it gave rise to a new expression at the company: to “disappear” someone. That’s how Theranos employees used the normally intransitive verb when someone was dismissed. “Sunny disappeared him,” they would say.
Wall Street Journal investigative reporter John Carreyrou recounts some of the more unusual experiences he had while uncovering the story of Theranos's business practices.
By the summer of 2013, the Theranos machine had gone through three iterations. The first, a microfluidic device, had been abandoned in 2007. The second, a converted glue-dispensing robot called the Edison, had been shelved in 2010. The third, which Ms. Holmes had christened the miniLab, was supposed to be the one that finally turned her vision into reality. But while she and Mr. Balwani were telling Theranos’s retail partner, Walgreens, that the miniLab could perform the full range of lab tests on tiny finger-stick samples, the truth was that it remained a work in progress, according to the SEC. The list of its problems was lengthy.
The biggest problem of all was the dysfunctional corporate culture in which it was being developed. Ms. Holmes and Mr. Balwani brushed off those who raised concerns or objections as cynics and naysayers. Employees who persisted in doing so were usually marginalized or fired.
While Ms. Holmes was fast to catch on to engineering concepts, Mr. Balwani often appeared out of his depth during those discussions, according to several former Theranos engineers. He had a habit of repeating technical terms he heard others using. During one meeting, he latched onto the term “end effector,” which signifies the claw at the end of a robotic arm. Except Mr. Balwani didn’t hear “end effector”—he heard “endofactor.” For the rest of the meeting, he kept referring to the fictional endofactors. Mr. Balwani’s knowledge of chemistry also was spotty: For instance, he mixed up the chemical symbols for potassium (K) and phosphorus (P), a mistake most high-school chemistry students learn to avoid.
Left, Theranos manufacturing employees at the Newark, Ca., facility making miniLab blood analyzers, which didn’t work as advertised. Right, the company’s proprietary sample collection device. Photo: Theranos, Inc.
Though the miniLab remained a malfunctioning prototype, Ms. Holmes was intent on launching Theranos’s fingerstick tests in Walgreens stores by September 2013. So she and Mr. Balwani dusted off the Edison and launched with that, the SEC says. But the Edison could handle just one class of blood tests; to perform the dozens of others they had promised Walgreens their technology could handle, they needed a workaround. The solution was to secretly modify third-party commercial machines to adapt them to small blood samples.
When Christopher James and Brian Grossman of San Francisco hedge fund Partner Fund Management came to visit Theranos’s Palo Alto offices in early 2014, Mr. Balwani told them that Theranos had developed about 300 different blood tests and could perform 98% of them on tiny fingerstick samples—up to 70 from a single sample—according to a lawsuit that Partner Fund later filed against Theranos. (Theranos settled the suit, which alleged fraud, for $43 million in the spring of 2017 without admitting or denying wrongdoing.) Mr. Balwani mentioned nothing to Messrs. James and Grossman about using commercial analyzers; the implication was that all the tests were handled on special Theranos technology, according to the Partner Fund suit.
Messrs. James and Grossman were impressed by something else Mr. Balwani and Ms. Holmes said—that Theranos’s devices were being used in the field by the U.S. military, according to a person they briefed on their meetings with Theranos. If that were true, a contract with the Department of Defense could add another big source of revenues.
A spreadsheet with financial projections that the Partner Fund suit alleges Mr. Balwani sent them supported this notion. It forecast gross profits of $165 million on revenues of $261 million in 2014 and gross profits of $1.08 billion on revenues of $1.68 billion in 2015.
But the U.S. military wasn’t using the Theranos devices in the field. And six weeks later, Theranos’s controller, Danise Yam, sent very different revenue and profit projections to a firm that Theranos had hired to price employee stock options, according to a deposition Ms. Yam gave in the Partner Fund litigation. Her figures were about one-fifth the size of Mr. Balwani’s for 2014, and less than a 10th of his amounts for 2015.
‘When Ms. Holmes and Mr. Balwani wanted to impress Vice President Joe Biden with a vision of a cutting-edge, automated laboratory, they created a fake one.’
In July 2015, Ms. Holmes invited Vice President Joe Biden to come visit Theranos’s facility in Newark, Calif. It was an audacious move given that the company’s lab had been operating without a real director since the previous December. The lab’s morale was low. Two months earlier, Mr. Balwani had terrorized its members after a scathing critique of Theranos, entitled “A pile of PR lies,” appeared on Glassdoor, the website where employees review companies anonymously. Negative Glassdoor reviews about the company weren’t unusual; Mr. Balwani made sure they were balanced out by a steady flow of fake positive reviews he ordered members of the HR department to write, according to former employees. But this particular one had sent him into a rage. After getting Glassdoor to remove it, he conducted interrogations of employees he suspected of having written it, but never found the culprit.
More recently, Mr. Balwani had fired Lina Castro, a member of the microbiology team. According to colleagues, Ms. Castro’s offense had been to push the company to institute standard environmental health and safety protections in the lab. “I did everything with integrity for the patients and for my team,” Ms. Castro said in an interview. “I wanted everyone in the laboratory to work in an environment that was safe.”
Ms. Holmes and Mr. Balwani wanted to impress Vice President Biden with a vision of a cutting-edge, automated laboratory. Instead of showing him the actual lab with its commercial analyzers, they created a fake one, according to former employees who worked in Newark. They made the microbiology team vacate a room it occupied, had it repainted, and lined its walls with rows of miniLabs stacked up on metal shelves.
Ms. Holmes took Mr. Biden on a tour of the facility and showed him the fake automated lab. In a discussion with a half-dozen industry executives right afterward, Mr. Biden called what he had just seen “the laboratory of the future.” Through a spokeswoman, Mr. Biden declined to comment.
Three months later, on Oct. 15, 2015, The Wall Street Journal published the first of a series of articles raising questions about Theranos’s technology and practices. The Journal’s reporting triggered the SEC probe as well as a criminal investigation spearheaded by the U.S. attorney’s office in San Francisco. The U.S. attorney has declined to comment.
At first, the company strongly denied the Journal’s reporting. But Ms. Holmes later conceded problems at Theranos’s Newark lab in an interview with Maria Shriver on NBC’s “Today” show in April 2016. As CEO, Ms. Holmes said, she ultimately was the one responsible.
Yet it was Mr. Balwani who took the fall three weeks later. While Theranos called his departure a voluntary retirement in a news release, a friend Ms. Holmes confided in shortly afterward says she fired him.
These days, Mr. Balwani and Ms. Holmes are no longer a couple. Their lawyers have instructed them not to communicate with each other, people familiar with the matter said, because of the ongoing criminal probe.
Write to John Carreyrou at john.carreyrou@wsj.com
—This essay is adapted from “Bad Blood: Secrets and Lies in a Silicon Valley Startup” to be published by Alfred A. Knopf on May 21.
Write to John Carreyrou at john.carreyrou@wsj.com
When Christopher James and Brian Grossman of San Francisco hedge fund Partner Fund Management came to visit Theranos’s Palo Alto offices in early 2014, Mr. Balwani told them that Theranos had developed about 300 different blood tests and could perform 98% of them on tiny fingerstick samples—up to 70 from a single sample—according to a lawsuit that Partner Fund later filed against Theranos. (Theranos settled the suit, which alleged fraud, for $43 million in the spring of 2017 without admitting or denying wrongdoing.) Mr. Balwani mentioned nothing to Messrs. James and Grossman about using commercial analyzers; the implication was that all the tests were handled on special Theranos technology, according to the Partner Fund suit.
Messrs. James and Grossman were impressed by something else Mr. Balwani and Ms. Holmes said—that Theranos’s devices were being used in the field by the U.S. military, according to a person they briefed on their meetings with Theranos. If that were true, a contract with the Department of Defense could add another big source of revenues.
A spreadsheet with financial projections that the Partner Fund suit alleges Mr. Balwani sent them supported this notion. It forecast gross profits of $165 million on revenues of $261 million in 2014 and gross profits of $1.08 billion on revenues of $1.68 billion in 2015.
But the U.S. military wasn’t using the Theranos devices in the field. And six weeks later, Theranos’s controller, Danise Yam, sent very different revenue and profit projections to a firm that Theranos had hired to price employee stock options, according to a deposition Ms. Yam gave in the Partner Fund litigation. Her figures were about one-fifth the size of Mr. Balwani’s for 2014, and less than a 10th of his amounts for 2015.
‘When Ms. Holmes and Mr. Balwani wanted to impress Vice President Joe Biden with a vision of a cutting-edge, automated laboratory, they created a fake one.’
In July 2015, Ms. Holmes invited Vice President Joe Biden to come visit Theranos’s facility in Newark, Calif. It was an audacious move given that the company’s lab had been operating without a real director since the previous December. The lab’s morale was low. Two months earlier, Mr. Balwani had terrorized its members after a scathing critique of Theranos, entitled “A pile of PR lies,” appeared on Glassdoor, the website where employees review companies anonymously. Negative Glassdoor reviews about the company weren’t unusual; Mr. Balwani made sure they were balanced out by a steady flow of fake positive reviews he ordered members of the HR department to write, according to former employees. But this particular one had sent him into a rage. After getting Glassdoor to remove it, he conducted interrogations of employees he suspected of having written it, but never found the culprit.
More recently, Mr. Balwani had fired Lina Castro, a member of the microbiology team. According to colleagues, Ms. Castro’s offense had been to push the company to institute standard environmental health and safety protections in the lab. “I did everything with integrity for the patients and for my team,” Ms. Castro said in an interview. “I wanted everyone in the laboratory to work in an environment that was safe.”
Ms. Holmes and Mr. Balwani wanted to impress Vice President Biden with a vision of a cutting-edge, automated laboratory. Instead of showing him the actual lab with its commercial analyzers, they created a fake one, according to former employees who worked in Newark. They made the microbiology team vacate a room it occupied, had it repainted, and lined its walls with rows of miniLabs stacked up on metal shelves.
Ms. Holmes took Mr. Biden on a tour of the facility and showed him the fake automated lab. In a discussion with a half-dozen industry executives right afterward, Mr. Biden called what he had just seen “the laboratory of the future.” Through a spokeswoman, Mr. Biden declined to comment.
Three months later, on Oct. 15, 2015, The Wall Street Journal published the first of a series of articles raising questions about Theranos’s technology and practices. The Journal’s reporting triggered the SEC probe as well as a criminal investigation spearheaded by the U.S. attorney’s office in San Francisco. The U.S. attorney has declined to comment.
At first, the company strongly denied the Journal’s reporting. But Ms. Holmes later conceded problems at Theranos’s Newark lab in an interview with Maria Shriver on NBC’s “Today” show in April 2016. As CEO, Ms. Holmes said, she ultimately was the one responsible.
Yet it was Mr. Balwani who took the fall three weeks later. While Theranos called his departure a voluntary retirement in a news release, a friend Ms. Holmes confided in shortly afterward says she fired him.
These days, Mr. Balwani and Ms. Holmes are no longer a couple. Their lawyers have instructed them not to communicate with each other, people familiar with the matter said, because of the ongoing criminal probe.
Write to John Carreyrou at john.carreyrou@wsj.com
—This essay is adapted from “Bad Blood: Secrets and Lies in a Silicon Valley Startup” to be published by Alfred A. Knopf on May 21.
Write to John Carreyrou at john.carreyrou@wsj.com
What's not getting reported enough is all those former government people that were on their board.... Kissinger. Some other people who were high up.
More to the story/company when you look at their board structure and their industry
More to the story/company when you look at their board structure and their industry
88m3
Fast Money & Foreign Objects
Think it was a black budget project that spun out of control? Seems like a common stock fraud to me but I haven't dug that deep.
King of Creampies
Hop in. You coming too!
I still think she couldn't cut it at Stanford and came up with this shyt hoping hiring the right people will just figure it out for her...not to mention one of her Theranos people KILLED himself over the guilt of this shyt.
Have to wonder of a civil suite was bought on from it.
Have to wonder of a civil suite was bought on from it.
88m3
Fast Money & Foreign Objects
I still think she couldn't cut it at Stanford and came up with this shyt hoping hiring the right people will just figure it out for her...not to mention one of her Theranos people KILLED himself over the guilt of this shyt.
Have to wonder of a civil suite was bought on from it.
Oh wow...
If a civil suit was brought there would be court documents and I'd imagine someone would publish them
