[atlantic]

Your argument is applicable to all white-collar crime. And it's emotionally-based, because she looks like one of us, not like a stereotypical thug. But in fact, she lied to take money from investors - theft on a grand scale - even if she wasn't wielding a sawn-off shotgun and wearing a ski mask. Edit: aside from that, I agree the potential sentence is very long, but that is characteristic of the US justice system, right across the board. In my country, the maximum sentence is 25 years, regardless of the crime.

[mschuster91]

On the other side, one might make the argument that someone with millions of dollars to spare on early-stage investments should also be able to do their own due diligence on investments - otherwise, why would the status "accredited investor" be required? And, implicitly, that people like Holmes and Madoff who decide to exploit greed and unprofessionalism serve a vital purpose in a free market by acting as predators removing weak elements from the market.

Experts have warned from the beginning that Theranos made unrealistic to impossible announcements. Anyone investing at that scale without consulting experts IMO does not deserve protection from the law.

If Theranos is one thing, it is a real life example of why group dynamics and investing don't mix, and why the best thing to come out of r/wallstreetbets is the saying "do your own DD".

[bumby]

I think that argument gets lost when the company actively lies. In Theranos’ case, they forged letters by Pfizer claiming the system was validated. If a company is forging, say accounting books, it’s hard to claim due diligence would have prevented being swindled.

[mschuster91]

> In Theranos’ case, they forged letters by Pfizer claiming the system was validated.

Wirecard did the same with accounting statements from the Philippines, and EY accepted them without verifying that the statements are correct at the bank offices, they didn't even cross check if the billions of dollars could even be on the books of the Philippine banking system, and now EY is in hot waters.

If I were an investor and were presented with claims of validation of a technology that is hotly contested, the very first thing I'd do is call up or otherwise contact the issuer and verify the authenticity of that claim. It's like ten minutes to find out the contact information of Pfizer's Investor Relations team and compose a letter - investors who are unwilling to commit at least this little bit of verification deserve to be relieved of their money and office.

[bumby]

EY = Earnst & Young?

You bring up good points (although I think I disagree with your conclusion that people ‘deserve’ to be defrauded). There seems to be active collusion at times between oversight and the companies being audited. This isn’t the first time EY has been accused of this and we see it with credit ratings agencies too.

I think I come to a different conclusion because we all outsource our quality assurance on a daily basis. Did you review the airworthiness certificate of the last plane you flew on? If not, do you “deserve” to crash because you outsourced to the FAA without verifying it yourself?

I’d say the blame should fall to the third party auditors who failed the system, not necessarily to those who trusted them.

[mschuster91]

> Did you review the airworthiness certificate of the last plane you flew on? If not, do you “deserve” to crash because you outsourced to the FAA without verifying it yourself?

Am I a normal airline passenger/pilot or did I sign up as a test pilot for experimental / new / freshly repaired aircraft?

The latter get higher pay simply because that risk is part of their job, and to my knowledge test pilots have the option to refuse jobs they deem to be too dangerous. Same is for investors, with the difference that human lives can irrevocably be lost whereas money is only a virtual thing.

[bumby]

I don't think that's a good analogy to illustrate the risk profiles. You are incurring a risk by getting on a plane, but you have generally assumed that risk is mitigated by a third party verification process (namely, certification by the FAA in the U.S.). Likewise, an investor relies on third parties (auditors, SEC, etc.) to mitigate risk. Test pilots, by definition, are flying non-certified airframes meaning they are paid to take on the additional risk not mitigated by a third party verification process. This is why many investors will abstain from investing in companies from countries with weak third party certification processes.

The system breaks down when the third party is corrupted or incompetent in terms mitigating that risk. If we're going to say investors/airline passengers 'deserve' an outcome regardless of the role of a third party verifier, I'd probably say there's no reason for an SEC, FAA, audits, or even journalists for that matter. We've largely said as a society those organizations play an important oversight role in mitigating risk.

[metabagel]

For the most part, it wasn’t really possible to perform due diligence in this case, because Theranos refused to submit to an audit, and otherwise lied and actively prevented investors from getting the true story. For that reason, some potential investors walked away.

[datavirtue]

She straight up said she was backed by partnerships with big pharma and that the device was working. I would have invested in a heart beat given the claimm. Lying at that level is insane. She need removed from the presence of law abiding citizens as long as possible.

[moron4hire]

I've been involved in investment due diligence investigations. You don't just take people's word for that sort of stuff. You literally pry through everything and confirm it for sure.

[kingkawn]

Lol stereotypical thug cmon man

[neuronic]

Not to defend her actions, but why do Americans particularly insist on severe, inhumane, and disproportional punishment? It would be completely unthinkable for her to get anything >15 years in Germany, likely much much less than that (let'ss ee how Wirecard goes). She didn't murder or harm anyone. She committed fraud.

As if sending her to prison for 5-10 years wouldn't be enough? Who will give her money or believe anything she does afterwards? She's done for no matter what. 65+ years is just to be cruel and enjoyment of the cruelty.

Even if it is the health sector where harm can easily be done, punishments shouldn't be based on hypotheticals.

[metabagel]

Personally, I think she should get 12 years. That’s a long time.

I’m an American. As a society, we believe in the deterrent value of punishment (which is proven not to work). We also see prison as a place to put dangerous people in order to protect society. We see only the risk of letting dangerous people out of prison, not any potential benefit. If we have to lock up 1 innocent person to be sure that 9 dangerous people gets locked up, those numbers work for us. It’s a kind of tunnel vision focused on the worst offenders and ignoring the many non-violent or rehabilitated offenders.

So, it’s just this very one-sided view, very risk averse and without much empathy or grace toward the offender.

[metabagel]

Also, I think we tend to minimize how hard it is to serve time in a cage. And when people come out of prison and commit further crimes, we assume they didn’t spend enough time behind bars. It’s the one and only solution to the problem. If it’s not working, we apparently just need more of it.

[patrec]

> As a society, we believe in the deterrent value of punishment (which is proven not to work).

Do you genuinely believe that high-IQ white collar criminals are exactly the type of person unable to do even the most basic risk-reward analysis?

[metabagel]

It doesn't seem to have worked for Elizabeth Holmes or Bernie Madoff.

According to this fact sheet, "the certainty of being caught is a vastly more powerful deterrent than punishment". Elizabeth Holmes and Bernie Madoff probably didn't think they would be caught.

https://www.ojp.gov/pdffiles1/nij/247350.pdf

NIJ is the research, development and evaluation agency of the U.S. Department of Justice.

[patrec]

> It doesn't seem to have worked for Elizabeth Holmes or Bernie Madoff.

Penalizing mass murder also doesn't seem to have worked to prevent 9/11. The question is how representative the perpetrators are in these cases. I'd say not very -- do you disagree?

> According to this fact sheet, "the certainty of being caught is a vastly more powerful deterrent than punishment".

Just because you read it in some fact sheet doesn't mean it's true or even makes any sense. Probabilities and punishments are not commensurable so what does this even mean (without some attempt to describe a subjective loss function)?

Taken literally it's obviously untrue. Examples abound where people don't care much about being caught because the punishment close to non-existent or very light in comparison to the rewards. This is why why gangs like to groom minors, the likely reason why San Francisco has a shoplifting problem, or to bring it back to white-collar crime, why certain types of corporate and individual malfeasance occur over and over again, because the risks, even when caught, are minor but the rewards are not.

Your original claim is tantamount to saying that people don't react to incentives. Which beggars belief. That is not to say that criminals in particular respond to incentives in a way that maximizes their life outcomes or is intuitively obvious, or that for many crimes lowering penalties and investing in other things instead (like detection or prevention) wouldn't produce better societal results. But on the whole I'd expect high-flying financial criminals to respond to incentives set by justice system in a way that is more aligned with their actual utility function than say crack addicts committing robberies to finance their next fix.

[candiodari]

What Elizabeth Holmes tried to do is possible. So we can be a bit kinder than that: she thought with enough help she’d figure it out and make her lies the truth before being found out.

She didn’t of course, but it wasn’t impossible to do. She just wasn’t good enough.

After all most cells in your body do a few thousand blood tests on millilitres of blood every second. Our technology has a long way to go but it can be done.

[catillac]

“She didn't murder or harm anyone. She committed fraud.”

Fraud is harm.

[kesselvon]

I think what they're saying is fraud isn't murder. The median murder sentence in the US is like 15 years.

[JoeAltmaier]

Misdiagnosing people is not harmless. Compare it to selling snake-oil cures, that prevent folks from getting actual medical help. It could kill people. Not harmless, done at a huge scale, and probably killed people or shortened their lives.

[crispyambulance]

> why do Americans particularly insist on severe, inhumane, and disproportional punishment?

Part of the reason is because punishment is so wildly variable and also sentences are almost always shortened drastically. It never looks like justice prevails. A "20 year sentence" is never actually "20 years", it could easily end up being a few years + probation, or even less.

[kingkawn]

Not sure why you replied to me, I was objecting to the parent comment’s casual endorsement of a racist archetype.

Also, america sure as shit better not go light on a rich lady who sold profit dreams to old men while giving outrageous sentences to poor people everyday. You want to talk about criminal Justice reform she is definitely last on the list of people who deserve leniency.

[vasilipupkin]

looks like one of us? wut?