A Half-baked Justice
without broader accountability, the next fraudster will likely cause even more damage.
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Elizabeth Holmes, the founder of the blood-testing startup, began to serve her 11.25-year prison sentence last week after being convicted of committing multiple frauds by a federal jury in January 2022 and having her subsequent attempts to stay out of jail rejected by federal judges.
Since my day job is in finance and investment, I have watched the Holmes case closely. Her surge to fame was supposed to be the perfect "girl power" story in our progressive age. She dropped out of Stanford University and founded Theranos, a blood-testing startup, in 2003 at age 19. She set out to revolutionize blood testing and, by extension, the healthcare industry, except she had never studied medicine and had no healthcare industry experience. Most crucially, her blood-testing machine could not perform as many basic tests as she boasted, and among the few tests it could conduct, the results were not reliable. Yet, Theranos became one of the most "successful" startups in Silicon Valley, with a valuation of over $9 billion in 2014, making Holmes the youngest self-made female billionaire. She became one of the most celebrated business leaders in the U.S., and her pictures graced many covers.
Holmes pulled off her duplicitous scheme the old-fashioned way: "fake it until you make it." She dressed the part of a visionary entrepreneur by wearing a black turtleneck in public and intentionally drawing comparisons between herself and Apple’s late founder, Steve Jobs. She’s media savvy and crafted her company’s founding story with a story about her self-professed paranoia about needles. She filled her speeches and interviews with the sound bites liberal media love, such as declaring the affordability of medical tests "a basic human right." She even faked a deep voice to sound authoritative when speaking in public.
While Holmes eventually got what she deserved, the American public is no safer from future fraudulent schemes because those who enabled and prolonged Holmes’ scheme remain free of consequences.
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