In this week’s Trial of the Century, from the New York Times news section:
SAN JOSE, Calif. — Elizabeth Holmes, the founder of the failed blood testing start-up Theranos, was found guilty of four of 11 charges of fraud on Monday, in a case that came to symbolize the pitfalls of Silicon Valley’s culture of hustle, hype and greed.
Ms. Holmes, who had once promised to revolutionize health care, was the most prominent executive to field fraud accusations in a generation of high-flying, money-losing start-ups. A jury of eight men and four women took 50 hours over seven days of deliberations to reach a verdict, convicting her of three counts of wire fraud and one count of conspiracy to commit wire fraud by lying to investors to raise money for her company.
Ms. Holmes was found not guilty on four other counts related to defrauding patients who had used Theranos’s blood tests. The jury was unable to reach a verdict on three counts of deceiving investors, for which Judge Edward J. Davila of California’s Northern District said he planned to declare a mistrial.
It seems to me that terrifying patients with bad blood tests (as far as I know, nobody died due to Holmes’ blood test machine being so unreliable, but some patients had to rush to the emergency room and get a real blood test when Theranos told them they were practically dead) is worse than costing various super-elites like Rupert Murdoch and the Waltons some money. But the jury saw the law the other way around.
A few other lessons:
- There is no Inner Party who actually knows what’s going on. If there is a well-informed Inner Party, Henry Kissinger and the other Theranos board members — George Shultz (former Secretary of State), “William Perry (former U.S. Secretary of Defense), Henry Kissinger (former U.S. Secretary of State), Sam Nunn (former U.S. Senator), Bill Frist (former U.S. Senator, senate majority leader and heart-transplant surgeon), Gary Roughead (Admiral, USN, retired), Jim Mattis (General, USMC), Richard Kovacevich (former Wells Fargo Chairman and CEO) and Riley P. Bechtel (chairman of the board and former CEO at Bechtel Group) — would be in it. But they just made fools of themselves.
- Although much of the spin is that this discredits Silicon Valley, the SV venture capitalists and the like came out looking pretty good by largely passing on Theranos. Larry Ellison was one of the few Silicon Valley figures to invest. Most of the investors and directors instead came from the non-tech center-right Establishment.
- American elites, at least outside of Silicon Valley, are ardently feminist both in terms of expectations and whom they root for. Holmes found a whole bunch of Old White Men who were excited about helping discover The Female Steve Jobs, the first woman tech billionaire founder.