[carriganisms]

This is called due diligence, and it's on the investor to perform their own due diligence. For a product that isn't commercially available to consumers yet, due diligence should be enough.

In the case of something like Theranos, I thoroughly agree. Oversight of a commercially available product, especially one with health implications, is definitely necessary. Although it seems even these systems failed in the Theranos case.

[imglorp]

There is actually the legal test of a Reasonable Person.

If they say they're going to sell trucks, and they present a truck doing truck things (moving), most people would assume it's a complete truck as portrayed. An empty shell is just fraud in the court, hopefully.

[awb]

Agreed, but a reasonable person would also ask: "how well does it drive up hills?", "what are it's miles per charge?", etc. at which point the truth is uncovered.

It's not a good look, but you also shouldn't be investing based on what amounts to a commercial. This should be another stain for the company and another warning sign for investors, but we don't need a law against misleading promo videos because almost all are short on information and high on emotion. It's the investor's job to get the information behind the video.

[sib]

While it's true that funders should perform due diligence, diligence for fundraising still relies on an underlying need for the entity raising funds to be truthful.

As an example, if you apply for a bank loan and falsify the application, you can still be charged with fraud and go to jail even though the bank potentially could have discovered the falsehood by hiring an investigator before issuing the loan.

[jbay808]

The harm caused by this kind of deception is not only to the investors (or to the deceivers, when they are found out). It also increases the general background level of distrust, which harms the honest.

[xkjkls]

These systems where never triggered because of where Theranos was in the development process.

[R0b0t1]

The oversight is ostensibly someone figuring out it is a scam and filing a complaint with the district attorney so they can prosecute the scammer.

[ric2b]

That doesn't scale for public companies like Nikola, you can't have thousands of investors visiting the headquarters and asking questions.