Week 4 - Elizabeth Holmes and Theranos

Question 1

What was the Theranos scandal?

Answer 1

Theranos falsely claimed it could run many medical tests from a drop of blood. Elizabeth Holmes misled investors, doctors, and patients. The technology never worked.

Question 2

What did Theranos claim?

Answer 2

That it could run hundreds of blood tests using just a few drops of blood from a finger prick.

Question 3

Why was Theranos popular?

Answer 3

The tech promised faster, cheaper, and more accessible blood tests.
💰Valued at $9 billion, with major investors and media hype.

Question 4

What went wrong with Theranos?

Answer 4

👉 The technology did not work as claimed.
🔧 They used other companies’ machines and gave inaccurate health results.

Question 5

How was the fraud exposed?

Answer 5

📰 Journalist John Carreyrou published an investigation in The Wall Street Journal (2015).
💬 Whistleblowers confirmed the deception.

Question 6

What were the legal consequences?

Answer 6

👉 Holmes and COO Sunny Balwani were charged with fraud.
⚖️ Holmes was found guilty in 2022 and sentenced to 11+ years in prison.

Question 7

Why is this ethically important?

Answer 7

👉 It’s a case of “dirty hands”—pursuing a good goal (innovation) with unethical means (fraud).
🚨 Highlights the risks of deception and overconfidence in business.