Risk register · entry
Q-F · FraudTheranos
A blood analyser that never worked, sold as validated to investors.
The fifth quadrant, where the thing was never real. The tell is that the story is too clean.
Why this room
The payoff structure looked complex and probabilistic (an unproven medical technology that might or might not work) but the tail outcome was made simple and near-certain by deliberate concealment, which is the signature that moves an event from ordinary technological risk into the Fraud quadrant.
The record
- Investors put roughly $945 million into Theranos over its lifetimelikely
- Peak valuation of approximately $9 billion in 2014certain
- Elizabeth Holmes convicted January 2022 on 4 counts of wire fraud and 1 count of conspiracycertain
- Holmes sentenced November 18, 2022 to 11 years 3 months (135 months) in prisoncertain
- Sunny Balwani convicted on all 12 counts in July 2022, sentenced to 12 years 11 months in December 2022certain
- Approximately 1.5 million patient blood tests run through the Arizona Walgreens partnership, 2013-2016uncertain
- Roughly one in ten Theranos test results inaccurateuncertain
- Safeway invested $350 million in 2012 to retrofit 800 store locations; deal terminated 2015likely
- SEC civil settlement March 2018: Holmes paid $500,000, forfeited 19 million shares, accepted 10-year officer/director bancertain
- John Carreyrou's Wall Street Journal exposé published October 2015, triggering Walgreens to suspend expansioncertain
Sources
The book
This entry is one of 111 in the register. The full story, and what it cost the people who lived it, is in Risky Business by Claudia Zeisberger, David Munro and Joanna Reijgersberg-Siew.
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