Billion dollars Fraud Behind ‘Rain drop sized-blood’ Business of Elizabeth Holmes (II)
Honesty is the foundation of cooperation which is demonstrated through transparency. If the entity/individual did not show transparency, investors need to reconsider their investment plans.
Transparency in Theranos was a taboo. In fact, Holmes had received much criticism regarding the transparency of Theranos’ operational since the beginning. Back in 2016, scientists and physicians communities questioned the methodology of the device in analyzing blood to ensure if it was a real breakthrough. Instead of answering all the questions, Theranos simply said they could not reveal such confidential matter as it was related to company’s intellectual property and digressed from the question by launching a new product.
According to the former CEO of ImClone Systems Samuel Waksal on “Power Lunch” broadcast by CNBC on Wednesday (14/3) in the science world, intellectual property right was very important. Yet, one could not easily say it was secret when asked about a scientific breakthrough.
3. No proof of claim
One of indications in fraudulent investment is exaggerated claims – whether it is achievement, income, and/or product benefits claims – without being supported by valid or founded data. Theranos once claimed that their portable device was deployed by the U.S Department of Defense in Afghanistan, which turned out to be false after an investigation by the SEC.
In addition, this company also claimed that their proprietary blood analysis technology worked well, but until this case came to surface, FDA has not yet made it clear to the Therano tests and Holmes herself never published any data journal to explain the claims. The SEC findings also say that instead of using its proprietary device, Theranos used modified third-party devices in the testing process, which add more false claims on the list.
With all these lies how come Theranos could get hundreds of millions of dollars? From the outside, Theranos seemed lucrative because first, it offered a tremendous technological leap that no one had offered before. Second, it is a tech company whose founder was woman – there are still few women who founded a ‘throne’ in Silicon Valley. Therefore, it is very important for potential investors to avoid falling for lucrative investment so easily and making reckless decisions. Do your due diligence before making a decision.
Photo: CNBC/2015 CNBC Media, LLC (http://nymag.com/daily/intelligencer/2016/05/theranos-voids-two-years-of-blood-test-results.html)