Thursday, March 15, 2018

ANOTHER FRAUD EXPOSED

Elizabeth Holmes, founder of Theranos, made it in the Wall Street Journal and New York times almost 10 years ago. She was widely touted for her expertise and business savvy by the pundits. Even my father was impressed by her. Sadly, she turns out to be a complete fraud. There was never anything there after all. It was an enormous ponzi scheme to get and keep getting investors to invest hundreds of millions of dollars into the scam she ran. In 2014 it was estimated that the company was worth $9 billion.

Some people are a little outraged that the SEC has only fined her $500,000 for the massive fraud she perpetuated. On the other hand she still has to face the various attorney's general and other private litigation but many are repelled by the leniency of the sentence awarded her by the SEC. They should not be. Let's see why.

Theranos Board of Directors included:

George Shultz former Secretary of State
William Perry   former Secretary of Defense
Riley Bechtel former CEO of Bechtel
William Foege former Director for U.S. Centers for Disease Control and Prevention
Richard Kovacevich former CEO Wells Fargo
James Mattis Current Secretary of Defense, retired 4 star general
Henry Kissinger former Secretary of State
Sam Nunn former U.S. Senator and about the only respectable democrat
Bill Frist former U.S. Senator, Majority Leader and heart surgeon
Gary Roughead former Chief of Naval Operations, retired 4 star admiral

Ms. Holmes had little difficulty it seems in pulling the wool completely over the eyes of her hapless and inept Board of Directors. I wonder that anybody retains any respect for any of them now.

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