Elizabeth Holmes gets 11 years and May Have Deserved Much Longer.
The Bloody Theranos Saga Ends in Tears… I Mean Years.
Theranos and Elizabeth Holmes By The Numbers:
$945 Million raised from investors including the Murdoch, Walton and DeVos Family Offices / Funds!
Sued by Partner Fund Management LP ($96M) and Walgreens ($140M)!
11-Count Federal Indictment!
1 Lover Blamed by Holmes for Her own Actions!
11-Year Sentence to Federal Prison!
Standing before the judge, an extremely pregnant Elizabeth Holmes somehow stopped short of a full apology. The world waited for some level of shame or disgust – which didn’t happen – as she delivered a statement that seemed as forced as it was brief. She conned investors so convincingly with a deep voice (many claimed was an act), Steve Jobs wardrobe and PR machine pitching her supposed mystique.
Was she still trying to con the court (and world) as the sentencing loomed? Many thought so, as fair questions came to mind: Did she rush into a marriage and motherhood, and then strategically leak touching photos of a normal-looking life, as part of a choreographed plan influence her sentencing? We can’t know for sure, of course, but there are many who don’t put it past her. In the end the judge wasn’t having any of it and, this time, fraud earned it rightful consequence as Holmes was handed over a decade of time to think in the custody of the federal penal system.
Biz Doc’s Take: In a twist of irony that you cannot make up, the same week that saw Holmes sentenced gave us the bankruptcy of FTX and emergence of what looks like an even greater con artist - Sam Bankman-Fried who seems to have blown right by Theranos and Holmes on the fraud scoreboard and just might pass Enron and Bernie Madoff. SBF is almost certainly next in line to face a judge and four things come to my mind as this sordid story plays out:
1) Like SBF, Elizabeth Holmes had people of influence to lean on and lean on them she did. We note that, in the end, that didn’t change the outcome of the next line on Holmes resume: INMATE 2023-2034.
2) SBF’s arrogant tweets and public statements as FTX went into bankruptcy are going to show up in court and it’s not going to be a good look. Celebs that are also named in the suit (and they HATE that part) will soon be showing their text message histories to investigators and they WILL turn on SBF as friends and families turn to them for an answer to, “Didn’t you even have a hunch about this guy?”
3) SBF is already using the Holmes playbook: blame your lover (who ran sister company Alameda) with whom you ran FTX into the ground. That f***ing alibi didn’t work for Holmes (see what I did there?). Holmes way-to-much-older lover Sonny Balwani is due for sentencing on Dec 7thand one wonders if his friends and family have him on suicide watch while he awaits HIS sentencing, which is likely to be in the same range: 11 years +/-.
4) The Holmes case restores at lease some hope to those who want to see change in the justice system where, let’s face it, there ARE two types of justice in America; one for people with access to expensive top-shelf defense lawyers (ahem, and letters Corey Booker who wrote to Holmes judge!) and one for people without such access. Is there a glimmer of hope? We’ll see.
For now, we all await the investigation and, horrifyingly, we are also standing-by for a nationwide cringe when the SBF sex tape is leaked. Ugh, I just threw up a little bit typing that sentence.
PS - We all owe John Carreyrou a thank you for his tireless investigative work that culminated in his book Bad Blood. He was the WSJ reporter who took unbelievable heat as Holmes defenders were many and aggressive. It turns out his well-researched work for the Journal, and then his book, were not only correct, but a cautionary tale and clear warning to all of us. While he could have raised his finger in an “I told you so” moment, he was professionally balanced and refused to gloat in his interview after Holmes sentencing. You can see that here.