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Supposed revolutionary biotechnology company Theranos has, to its horror, become the poster child for a tech startup implosion. The company was highly touted because its founder Elizabeth Holmes became one of the youngest billionaires in the world due to Theranos’ $9 billion valuation based on venture capital investment. For those not familiar with Theranos, the company claimed that it had developed a product that could run an accurate blood test with a pinprick’s worth of blood. It offered lab services and is attempting to develop a portable blood testing device.
Sounds promising, right? Especially with the great advances in medical technology. Well, it turns out it wasn’t so promising. Tyler Schultz, grandson of former secretary of state George Schultz, blew the whistle on the company for a pattern of inaccurate tests, unqualified lab workers, and incompetent lab management after 8 months working there. In fact, the lab was managed so poorly that the FDA has banned Elizabeth Holmes from running a clinical lab.
So yeah, it’s a good thing Tyler Schultz let the government know that the company was endangering patients with inaccurate lab tests. As someone who knows people whose lives have been saved by major health issues being caught by blood tests, this is a big issue. But that’s not the end of the story.
Naturally, the company was pissed that they got caught, but rather than taking their licks and trying to fix the issue, they decided to instead go after the whistleblower. In an attempt to silence Tyler Schultz, the senior staff, including Holmes, decided to bring legal proceedings into the matter, leading to him having to rack up $400,000 in legal fees as of the date of the article (November 17) and his grandfather George, who was on the board, won’t speak to him without lawyers.
You know what? The company screwed up, and now it’s valued, according to Forbes, at zero. Nothing. Nada. Don’t bully the whistleblower. Who knows how many lives he saved by going public with this? Still, it makes you wonder, how far will Silicon Valley money men and a star-studded board go to cover up their company’s mistakes? How far would your company go to silence a whistleblower? It’s a scary thought to think that a company can ruin your life just for you reporting wrongdoing of any kind.
Still, what goes around comes around, and Walgreens is hitting Theranos with a $140 million lawsuit because it offered Theranos’ blood testing services at its locations. However, as much as that may seem like justice, I’m sure Tyler Schultz’s wallet does not agree. .
[via Technology Review]
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@5OClockShadow_
Thanksgiving at the Schultz house is gonna be awkward this year.
Almost as awkward as the Weiner family with Micah and Anthony at the table…
Snitches get stiches, Tyler.
Who whistle blows on their own company and uses their real name?
Hopefully when he wins, they’ll be forced to cover his legal fees. Is there a legitimate way to blow the whistle anonymously? Asking for a friend.
Talk to your auditors. Then it looks like we did our jobs.
wiki leaks
He’ll a nice settlement once it’s all over.
With what cash? The company is broke
That would be a nice ending to this story, but I’ll bet Walgreens gets their money before this guy sees a dime…if there’s anything left.
All these stories of whistleblowers getting absolutely screwed by the company goes to show corporations do not give one shit about their employees. I would advise that if you are thinking of blowing the whistle on your company, just stockpile mountains of irrefutable evidence of the wrongdoings, then have a lawyer present the evidence to the company requesting a sum of money in exchange for all copies and originals. Better to get some cash and risk a lawsuit later than no cash and no ability to ever get another job.
Tort reform.
Apparently, the tech world is like the finance world used to be in the 80s. So I’ve heard.
I don’t say this to glamorize what they’ve done, but I’ve heard horror stories from friends in Silicon Valley, as well as down in Austin, about corruption and lengths these companies will take to make money.
Tech world is full of corruption. Look at what happened to Patrick Willis.
Wot happen
Basically, he got used.
http://www.inc.com/salvador-rodriguez/patrick-willis-alleges-fraud-in-lawsuit.html
Your future secretary of defense Mad Dog Mattis is a board member for Theranos and even tried pushing it through to the military before FDA approval. Probably not the company you want to tattle on.
Okay…maybe finance still..