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Theranos Used Shell Company To Secretly Buy Outside Lab Equipment, Says Report (arstechnica.com) 43

An anonymous reader quotes a report from Ars Technica: On Friday, the Wall Street Journal reported that the company "allegedly misled company directors" regarding its lab tests and used a shell company to buy commercial lab gear. These are just a few of the new revelations made by the Journal, which also include fake demonstrations for potential investors. The new information came from unsealed depositions by 22 former Theranos employees or members of its board of directors. They were deposed by Partner Fund Management LP, a hedge fund currently suing Theranos in Delaware state court. Theranos is also facing multiple lawsuits in federal court in California and Arizona, among others. The Journal, which did not publish the new filings, quoted former Theranos director Admiral Gary Roughead (Ret.), as saying that he was not aware that the company was using "extensive commercial analyzers" until it was reported in the press. The Journal described the filings as "some of the first substantive details to emerge from several court proceedings against the company, though they include only short excerpts from the depositions."
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Theranos Used Shell Company To Secretly Buy Outside Lab Equipment, Says Report

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  • by Anonymous Coward on Friday April 21, 2017 @05:37PM (#54279723)

    I thought women made better CEOs: more honest, less greedy, less "old boy network."

    Did the media lie to me?

    • Re: (Score:1, Funny)

      by Anonymous Coward

      I thought women made better CEOs: more honest, less greedy, less "old boy network."

      Did the media lie to me?

      But WOMEN IN TECH!!! WOMEN IN TECH!!! WOMEN IN TECH!!!

    • by Anonymous Coward

      Modded -1 because it's much easier to suppress the question than to answer it.

    • by HiThere ( 15173 )

      I think HP cast doubt on that hypothesis.

    • by sexconker ( 1179573 ) on Friday April 21, 2017 @07:56PM (#54280337)

      When you put a woman in as your CEO because they're a woman, you're going to have a bad time.
      The same goes for race, religion, sexual identity, whatever. Of course, this also includes straight, white, Christian males, though I suspect I've already offended certain people past the point of no return.

      How about you hire the best person for the job?

      How many Meg Whitmans, Elizabeth Holmeses, and Marissa Mayers are we going to see trotted out to kill companies for the sake of diversity?
      The worst part is that we see all the awful female executives getting pats on the back, accolades, etc., but the ones that are competent like Carly Fiorina (compare her to her successor) or even great (Lisa Su) get almost no fucking recognition.

      Remember when HP mattered? And Yahoo?

      • Remember when HP mattered?

        Yeah, but that was before someone "competent like Carly Fiorina" got her hands on it.

        Put down the bong, and pick up a book. [amazon.com]

        • It's relative. Fiorina didn't outright kill anything. Compare her to the outright con artists I mentioned that put companies into turbo death spirals.
          Put down the books and look at the real world.

          • by Anonymous Coward

            Fiorina didn't kill anything? She turned HP into a maker of commodity computers with razor thin margins... but HP does sell unbelievably overpriced inkjet printer ink, so I will give her that for $$$ making. It's not exactly the future though, is it?

        • by mikael ( 484 )

          That was the time Microsoft was in their "UNIX is legacy, Windows NT is the future" mood (mid 1990's). At this time Silicon Valley was dominated by the UNIX workstation companies. One by one they dropped their version of UNIX and adopted Windows NT as Microsoft kept throwing FUD everywhere. Even HP caved in. Commercial UNIX Applications developers were only interested in supporting a couple of platforms. When Windows NT comes along, the vendor with the least market share gets kicked off. Ultimately, it beca

      • by Anonymous Coward

        Sooo she founded the company...

    • by gweihir ( 88907 )

      Women are better at fraud too! They just seem to not know when to cut and run....

  • The Feds have been investigating her and her company for a long time and here are details of obvious illegal activity (fraud) discovered by a civil investigation during the course of an investor lawsuit.
    • by Anonymous Coward

      The Feds have been investigating her and her company for a long time and here are details of obvious illegal activity (fraud) discovered by a civil investigation during the course of an investor lawsuit.

      Money buys innocence.

    • by udachny ( 2454394 ) on Friday April 21, 2017 @05:52PM (#54279779) Journal

      Let's see, how about all these other people (from Wikipedia):

      former Secretary of State George Shultz, William Perry (former Secretary of Defense), Henry Kissinger (former Secretary of State), Sam Nunn (former U.S. Senator), Bill Frist (former U.S. Senator and heart-transplant surgeon), Gary Roughead (Admiral, USN, retired), James Mattis (General, USMC), Richard Kovacevich (former Wells Fargo Chairman and CEO) and Riley Bechtel (chairman of the board and former CEO at Bechtel Group). ...
      The board included past presidents or board members of the American Association for Clinical Chemistry such as Susan A. Evans, William Foege, former director U.S. Centers for Disease Control and Prevention, David Helfet, director of the Orthopedic Trauma Service at the Hospital for Special Surgery and professors, Ann M. Gronowski, Larry J. Kricka, Jack Ladenson, Andy O. Miller and Steven Spitalnik.

      Fabrizio Bonanni (former executive vice president of Amgen), Richard Kovacevich and William Foege, (former director of the Centers for Disease Control and Prevention), who would help to publicly introduce its technologies....

      there were many people involved there, people with government ties. This con was beautifully done, all the way till the inevitable failure. It may be not so easy just to pin everything on Holmes. The best con men (and women) are those, who are true believers in their own con, I wonder if she was (is) a true believer, did she con everybody else or also herself?

      • Why does this guy have such low karma? This post explains exactly why it's taking so long for any type of criminal charges.

        I wonder if she was (is) a true believer, did she con everybody else or also herself?

        I used to wonder that myself, but if they were in fact using fake demonstrations for potential investors, then she was part of the con.

      • by tomhath ( 637240 ) on Friday April 21, 2017 @07:35PM (#54280227)
        It's tempting to think she really believed the technology was almost working, that they just needed a little more time and money to iron out the kinks. But what makes me suspect she was a fraud from early on was her attempt to build a mystique around herself - the black turtleneck, bleached blond hair, all the VIPs she had on the board - it all reeks of snake oil.
        • by Anonymous Coward

          Anyone who didn't realize she was a fraud the second they noticed her wearing a black turtleneck in every single interview deserved to get fucked over.

        • by Anonymous Coward

          Don't shame women for having an appearance that does not conform to your opinions. The fact that a woman wears a black turtleneck does not mean that she is "asking" to be indicted.

          Don't shame women for having friends of whom you do not approve. The fact that a woman hangs out with men like Henry Kissinger [gizmodo.com] does not mean that she is "asking" to be indicted.

          Don't shame women for the things they do that you do not like. The fact that a woman runs an obvious confidence scam based on science fiction and the us

  • I have no idea what it is with startup founders -- they all seem to be playing in the same swamp. I guess it's the corporate veil -- it's amazing how much power company owners have compared to individuals. It's pretty obvious that Theranos' technology was a complete fraud. Maybe it didn't start out that way, but somewhere along the way they must have realized that they can't reproduce the results that conventional equipment gave. It must have been much more pleasant to take investors' money and live large f

  • Theranos used to be an editor here.

  • Thanos needs to use a shell company? Oh... er... no need to assemble, everyone. Back to whatever you were doing.
  • One wonders at the (lack of) common sense here. The premise is, "we will do blood testing on incredibly small vials of blood, because some people have difficulty with large specimen collection, and large specimen collection is inconvenient or impossible."

    What gets me is this is NOT a "Eureka!" moment like Uber or AirBnB or something.

    This is not a combination of old idea + do it better + better marketing, like Facebook.

    This is something that requires non-trivial technical invention in an area that is
    • My wife is a vet. She said the amount of blood they require to run similar panels on animals is a small fraction of what gets drawn from humans. I'm not sure what the difference is, but it seems it should be doable.
      • That is interesting... I think it's chalked up to a few different factors: animal blood != human blood; human testing often is done in larger bulk samples (for example, some disease tests pool small quantities of many samples. If it reacts, they then divide/test until they get to the offending sample); human tests are often subjected to multiple refinements or retests to meet FDA standards under one test umbrella. I'm not a doctor or lab tech, this is just what some quick Googling suggests.

        Note that my

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