Elizabeth Holmes & Theranos | 60 Minutes Archive

Elizabeth Holmes was just 19 years old Elizabeth Holmes was just 19 years old when she dropped out of Stanford when she dropped out of Stanford when she dropped out of Stanford University with a dream of creating a University with a dream of creating a University with a dream of creating a company that would revolutionize blood company that would revolutionize blood company that would revolutionize blood testing. She founded the startup testing. She founded the startup testing. She founded the startup Theranos. It boasted her technology Theranos. It boasted her technology Theranos. It boasted her technology could take a pinprick worth of blood could take a pinprick worth of blood could take a pinprick worth of blood from the finger and perform hundreds of from the finger and perform hundreds of from the finger and perform hundreds of laboratory tests. laboratory tests. laboratory tests. It was, she claimed, {quote} the most It was, she claimed, {quote} the most It was, she claimed, {quote} the most important thing humanity has ever built. important thing humanity has ever built. important thing humanity has ever built. At its zenith, Theranos was worth nearly At its zenith, Theranos was worth nearly At its zenith, Theranos was worth nearly $10 billion $10 billion $10 billion and Elizabeth Holmes became the youngest and Elizabeth Holmes became the youngest and Elizabeth Holmes became the youngest self-made female billionaire in the self-made female billionaire in the self-made female billionaire in the world. She was also, as The Wall Street world. She was also, as The Wall Street world. She was also, as The Wall Street Journal uncovered, at the center of a Journal uncovered, at the center of a Journal uncovered, at the center of a massive multi-year fraud. You're about massive multi-year fraud. You're about massive multi-year fraud. You're about to hear from insiders how the Theranos to hear from insiders how the Theranos to hear from insiders how the Theranos deception hoodwinked gullible investors deception hoodwinked gullible investors deception hoodwinked gullible investors and worse, endangered unsuspecting and worse, endangered unsuspecting and worse, endangered unsuspecting patients. patients. patients. >> Our work is in being able to make >> Our work is in being able to make >> Our work is in being able to make testing more accessible. testing more accessible. testing more accessible. >> Elizabeth Holmes built her company >> Elizabeth Holmes built her company >> Elizabeth Holmes built her company Theranos on this invention she named the Theranos on this invention she named the Theranos on this invention she named the Edison. A miniaturized blood analyzer Edison. A miniaturized blood analyzer Edison. A miniaturized blood analyzer that would disrupt the $60 billion lab that would disrupt the $60 billion lab that would disrupt the $60 billion lab testing industry dominated by giants testing industry dominated by giants testing industry dominated by giants LabCorp and Quest Diagnostics.

LabCorp and Quest Diagnostics. LabCorp and Quest Diagnostics. Holmes called her invention the iPod of Holmes called her invention the iPod of Holmes called her invention the iPod of healthcare and it made her a celebrity. healthcare and it made her a celebrity. healthcare and it made her a celebrity. She graced magazine covers and was She graced magazine covers and was She graced magazine covers and was praised by politicians and the press praised by politicians and the press praised by politicians and the press alike. alike. alike. >> You founded this company 12 years ago, >> You founded this company 12 years ago, >> You founded this company 12 years ago, right? Tell them how old you were. right? Tell them how old you were. right? Tell them how old you were. >> I was 19. >> She sold her vision with grandiose >> She sold her vision with grandiose claims that her blood tests would cost a claims that her blood tests would cost a claims that her blood tests would cost a fraction of current prices. fraction of current prices. fraction of current prices. Holmes' biotech startup was backed by an Holmes' biotech startup was backed by an Holmes' biotech startup was backed by an illustrious board packed with national illustrious board packed with national illustrious board packed with national security heavyweights like Henry security heavyweights like Henry security heavyweights like Henry Kissinger and James Mattis, the current Kissinger and James Mattis, the current Kissinger and James Mattis, the current defense secretary. defense secretary. defense secretary. The board was filled with friends of The board was filled with friends of The board was filled with friends of George P. Shultz, the former secretary George P. Shultz, the former secretary George P. Shultz, the former secretary of state who helped end the Cold War. He of state who helped end the Cold War. He of state who helped end the Cold War. He introduced his grandson Tyler to Holmes. introduced his grandson Tyler to Holmes. introduced his grandson Tyler to Holmes. Dazzled, Tyler Shultz became a believer Dazzled, Tyler Shultz became a believer Dazzled, Tyler Shultz became a believer and joined the company soon after and joined the company soon after and joined the company soon after getting his degree in biology from getting his degree in biology from getting his degree in biology from Stanford University. Stanford University. Stanford University. >> When you met her and you heard about >> When you met her and you heard about >> When you met her and you heard about Elizabeth Holmes' vision, what did you Elizabeth Holmes' vision, what did you Elizabeth Holmes' vision, what did you think?

think? think? >> I was totally sold on it. >> I was totally sold on it. >> I was totally sold on it. >> Tyler Shultz began working at Theranos >> Tyler Shultz began working at Theranos >> Tyler Shultz began working at Theranos in September 2013. in September 2013. in September 2013. It was a pivotal moment as the company It was a pivotal moment as the company It was a pivotal moment as the company announced a partnership with Walgreens. announced a partnership with Walgreens. announced a partnership with Walgreens. The deal would put an Edison machine in The deal would put an Edison machine in The deal would put an Edison machine in every store. every store. every store. Elizabeth Holmes claimed the Edison Elizabeth Holmes claimed the Edison Elizabeth Holmes claimed the Edison performed all the tests big lab machines performed all the tests big lab machines performed all the tests big lab machines like these could, from cholesterol to like these could, from cholesterol to like these could, from cholesterol to cancer, all from a painless finger cancer, all from a painless finger cancer, all from a painless finger prick. But Tyler Shultz says the Edison prick. But Tyler Shultz says the Edison prick. But Tyler Shultz says the Edison he saw just didn't work. he saw just didn't work. he saw just didn't work. >> Was it a sophisticated piece of >> Was it a sophisticated piece of >> Was it a sophisticated piece of machinery? machinery? machinery? >> No, there were components that would >> No, there were components that would >> No, there were components that would kind of fall off in the middle of kind of fall off in the middle of kind of fall off in the middle of testing that you would have to then fish testing that you would have to then fish testing that you would have to then fish out. They had doors that wouldn't close. out. They had doors that wouldn't close. out. They had doors that wouldn't close. They would get too hot and then they They would get too hot and then they They would get too hot and then they would get too cold. When I was there, we would get too cold. When I was there, we would get too cold. When I was there, we could not could not could not complete any complete any complete any test accurately on the devices that we test accurately on the devices that we test accurately on the devices that we were manufacturing. were manufacturing. were manufacturing. >> In 2012 >> In 2012 >> In 2012 >> Doug Matje joined Theranos in 2012 after >> Doug Matje joined Theranos in 2012 after >> Doug Matje joined Theranos in 2012 after getting his doctorate in biochemistry. getting his doctorate in biochemistry. getting his doctorate in biochemistry. His job was to adapt blood tests for the His job was to adapt blood tests for the His job was to adapt blood tests for the Edison. Tests which Holmes told Edison. Tests which Holmes told Edison. Tests which Holmes told investors were ready to use on patients.

investors were ready to use on patients. investors were ready to use on patients. >> But Elizabeth Holmes had told Walgreens >> But Elizabeth Holmes had told Walgreens >> But Elizabeth Holmes had told Walgreens in 2010 that it had developed this in 2010 that it had developed this in 2010 that it had developed this device that was capable of running any device that was capable of running any device that was capable of running any blood test from a few drops pricked from blood test from a few drops pricked from blood test from a few drops pricked from a finger in real time and less than half a finger in real time and less than half a finger in real time and less than half the cost of traditional labs. Was that the cost of traditional labs. Was that the cost of traditional labs. Was that true? true? true? >> No, certainly not. >> No, certainly not. >> No, certainly not. >> Do you think she was lying to Walgreens? >> Do you think she was lying to Walgreens? >> Do you think she was lying to Walgreens? >> I do, yeah. >> I do, yeah. >> I do, yeah. >> Are you a clinical lab specialist? >> Are you a clinical lab specialist? >> Are you a clinical lab specialist? >> No. >> No. >> No. >> Erika Cheung was fresh out of Berkeley >> Erika Cheung was fresh out of Berkeley >> Erika Cheung was fresh out of Berkeley with a degree in molecular and cell with a degree in molecular and cell with a degree in molecular and cell biology when she went to work at biology when she went to work at biology when she went to work at Theranos. She was just 22, but even the Theranos. She was just 22, but even the Theranos. She was just 22, but even the novice lab tech suspected something was novice lab tech suspected something was novice lab tech suspected something was very wrong when she saw faulty test very wrong when she saw faulty test very wrong when she saw faulty test results sent to Walgreens patients. results sent to Walgreens patients. results sent to Walgreens patients. >> And when did you think, I probably >> And when did you think, I probably >> And when did you think, I probably shouldn't be doing this? shouldn't be doing this? shouldn't be doing this? >> Uh pretty >> Uh pretty >> Uh pretty pretty soon in the process, especially pretty soon in the process, especially pretty soon in the process, especially when we started to pick up more patient when we started to pick up more patient when we started to pick up more patient samples. samples. samples. >> And when those samples were retested, >> And when those samples were retested, >> And when those samples were retested, she says, there were often contradictory she says, there were often contradictory she says, there were often contradictory results. results. results. >> Did you ever alert the patient? >> Did you ever alert the patient? >> Did you ever alert the patient? >> No, we didn't let them know, hey, we >> No, we didn't let them know, hey, we >> No, we didn't let them know, hey, we re-ran your patient sample and we're not re-ran your patient sample and we're not re-ran your patient sample and we're not actually positive about what the actually positive about what the actually positive about what the diagnosis is.

diagnosis is. diagnosis is. >> This is someone's health information. >> This is someone's health information. >> This is someone's health information. >> Exactly. This isn't uh an app crashing. >> Exactly. This isn't uh an app crashing. >> Exactly. This isn't uh an app crashing. This isn't, you know, someone's food This isn't, you know, someone's food This isn't, you know, someone's food delivery coming late. It's just a delivery coming late. It's just a delivery coming late. It's just a different ballgame. different ballgame. different ballgame. >> It's not the only game Elizabeth Holmes >> It's not the only game Elizabeth Holmes >> It's not the only game Elizabeth Holmes was playing. was playing. was playing. Theranos employees told us they were Theranos employees told us they were Theranos employees told us they were instructed to stage fake demonstrations instructed to stage fake demonstrations instructed to stage fake demonstrations for investors who visited company for investors who visited company for investors who visited company headquarters. headquarters. headquarters. >> It was kind of a show. All they would >> It was kind of a show. All they would >> It was kind of a show. All they would see was their blood getting collected. see was their blood getting collected. see was their blood getting collected. They didn't see what was going on behind They didn't see what was going on behind They didn't see what was going on behind closed doors about how it was processed. closed doors about how it was processed. closed doors about how it was processed. >> They would get their finger pricked >> They would get their finger pricked >> They would get their finger pricked with a small amount of blood. Then with a small amount of blood. Then with a small amount of blood. Then they'd be let out of the room, they'd go they'd be let out of the room, they'd go they'd be let out of the room, they'd go have a meeting, go have lunch, whatever, have a meeting, go have lunch, whatever, have a meeting, go have lunch, whatever, and and and at which point an engineer would run in at which point an engineer would run in at which point an engineer would run in the room, grab the cartridge, bring it the room, grab the cartridge, bring it the room, grab the cartridge, bring it out to the lab. out to the lab. out to the lab. >> So, was the Edison doing the testing? >> So, was the Edison doing the testing? >> So, was the Edison doing the testing? >> No, absolutely not. >> No, absolutely not. >> No, absolutely not. >> Who was doing the testing? >> Who was doing the testing? >> Who was doing the testing? >> It was scientists at the bench. >> It was scientists at the bench. >> It was scientists at the bench. >> By [snorts] hand? >> By [snorts] hand? >> By [snorts] hand? >> By hand, yeah. >> By hand, yeah. >> By hand, yeah. >> It was a bait and switch for investors >> It was a bait and switch for investors >> It was a bait and switch for investors that kept the money rolling in. Theranos that kept the money rolling in. Theranos that kept the money rolling in. Theranos raised nearly $900 million from those raised nearly $900 million from those raised nearly $900 million from those investors who now say they were swindled investors who now say they were swindled investors who now say they were swindled by Elizabeth Holmes and company by Elizabeth Holmes and company by Elizabeth Holmes and company president Ramesh Sunny Balwani. The pair president Ramesh Sunny Balwani. The pair president Ramesh Sunny Balwani. The pair claimed in investor documents obtained claimed in investor documents obtained claimed in investor documents obtained by 60 Minutes that Theranos technology by 60 Minutes that Theranos technology by 60 Minutes that Theranos technology was validated by the FDA, pharmaceutical was validated by the FDA, pharmaceutical was validated by the FDA, pharmaceutical companies, and was deployed on the companies, and was deployed on the companies, and was deployed on the battlefield by the US military in battlefield by the US military in battlefield by the US military in Afghanistan. Those claims were Afghanistan. Those claims were Afghanistan. Those claims were fabricated.

fabricated. fabricated. And in one public appearance after And in one public appearance after And in one public appearance after another, Holmes' pitch became even more another, Holmes' pitch became even more another, Holmes' pitch became even more fantastic and reckless. fantastic and reckless. fantastic and reckless. >> We've done some work with people at >> We've done some work with people at >> We've done some work with people at Hopkins Hopkins Hopkins who have developed and demonstrated that who have developed and demonstrated that who have developed and demonstrated that in blood in blood in blood you can see the onset of pancreatic you can see the onset of pancreatic you can see the onset of pancreatic cancer 17 years before a tumor forms. cancer 17 years before a tumor forms. cancer 17 years before a tumor forms. >> We called Johns Hopkins Medicine. They >> We called Johns Hopkins Medicine. They >> We called Johns Hopkins Medicine. They told us they never collaborated with told us they never collaborated with told us they never collaborated with Theranos. And Doug Matje says test data Theranos. And Doug Matje says test data Theranos. And Doug Matje says test data he compiled for the Food and Drug he compiled for the Food and Drug he compiled for the Food and Drug Administration was falsified. Administration was falsified. Administration was falsified. >> There was so much pressure from above to >> There was so much pressure from above to >> There was so much pressure from above to get good looking results that are going get good looking results that are going get good looking results that are going to be able to pass FDA guidelines that to be able to pass FDA guidelines that to be able to pass FDA guidelines that people were pressured into making things people were pressured into making things people were pressured into making things disappear. disappear. disappear. >> The bad results. >> The bad results. >> The bad results. >> Bad results. >> Bad results. >> Bad results. >> That's deceptive. >> That's deceptive. >> That's deceptive. >> Yeah. For sure. >> Yeah. For sure. >> Yeah. For sure. >> Did you ever go to your boss and say, >> Did you ever go to your boss and say, >> Did you ever go to your boss and say, "This isn't right"? "This isn't right"? "This isn't right"? >> Absolutely, all the time. But, you know, >> Absolutely, all the time. But, you know, >> Absolutely, all the time. But, you know, he was under a lot of pressure from the he was under a lot of pressure from the he was under a lot of pressure from the people above him and he was trying to do people above him and he was trying to do people above him and he was trying to do his best to make to make everyone happy.

his best to make to make everyone happy. his best to make to make everyone happy. >> This invention, it's going to be way up >> This invention, it's going to be way up >> This invention, it's going to be way up there. Um there. Um there. Um with with with the discovery of with with with the discovery of with with with the discovery of antibiotics. Uh number one antibiotics. Uh number one antibiotics. Uh number one >> Day-to-day operations were run by >> Day-to-day operations were run by >> Day-to-day operations were run by company president Sunny Balwani. company president Sunny Balwani. company president Sunny Balwani. Balwani is a millionaire software Balwani is a millionaire software Balwani is a millionaire software engineer with no training in the engineer with no training in the engineer with no training in the biological sciences. But he did have a biological sciences. But he did have a biological sciences. But he did have a powerful connection to Elizabeth Holmes. powerful connection to Elizabeth Holmes. powerful connection to Elizabeth Holmes. Sunny Balwani was her secret boyfriend. Sunny Balwani was her secret boyfriend. Sunny Balwani was her secret boyfriend. >> Some people are here because of the >> Some people are here because of the >> Some people are here because of the mission, the cause. Some people are mission, the cause. Some people are mission, the cause. Some people are hopefully here for the science. hopefully here for the science. hopefully here for the science. >> Balwani was also Holmes' enforcer, >> Balwani was also Holmes' enforcer, >> Balwani was also Holmes' enforcer, firing employees on the spot and firing employees on the spot and firing employees on the spot and berating scientists for failed tests. berating scientists for failed tests. berating scientists for failed tests. After a year and a half, Matje quit. After a year and a half, Matje quit. After a year and a half, Matje quit. >> I saw that there was you potentially >> I saw that there was you potentially >> I saw that there was you potentially fraud taking place. There was far too fraud taking place. There was far too fraud taking place. There was far too much much much illegitimate things going on there. I illegitimate things going on there. I illegitimate things going on there. I talked to Sunny, talked to Sunny, talked to Sunny, decided I didn't want to be there decided I didn't want to be there decided I didn't want to be there anymore, and I left. anymore, and I left. anymore, and I left. >> Tyler Shultz was also becoming >> Tyler Shultz was also becoming >> Tyler Shultz was also becoming disillusioned. disillusioned. disillusioned. >> You know, I had a personal relationship >> You know, I had a personal relationship >> You know, I had a personal relationship with Elizabeth. She was close to my with Elizabeth. She was close to my with Elizabeth. She was close to my family, and I felt like she was family, and I felt like she was family, and I felt like she was deceiving deceiving deceiving my family and the public.

my family and the public. my family and the public. >> And almost every media outlet, including >> And almost every media outlet, including >> And almost every media outlet, including us here at CBS, bought into the Theranos us here at CBS, bought into the Theranos us here at CBS, bought into the Theranos myth. myth. myth. >> A health care pioneer is being compared >> A health care pioneer is being compared >> A health care pioneer is being compared to visionaries like Bill Gates and Steve to visionaries like Bill Gates and Steve to visionaries like Bill Gates and Steve Jobs. Jobs. Jobs. >> Do you think she wanted to be the next >> Do you think she wanted to be the next >> Do you think she wanted to be the next Steve Jobs? Steve Jobs? Steve Jobs? >> She just really idolized him, so she >> She just really idolized him, so she >> She just really idolized him, so she wore the black turtleneck. I think she wore the black turtleneck. I think she wore the black turtleneck. I think she created a world where she was Steve Jobs created a world where she was Steve Jobs created a world where she was Steve Jobs for a little bit. for a little bit. for a little bit. >> As her wealth and reputation soared, >> As her wealth and reputation soared, >> As her wealth and reputation soared, Elizabeth Holmes took on the trappings Elizabeth Holmes took on the trappings Elizabeth Holmes took on the trappings of power. She bragged bulletproof of power. She bragged bulletproof of power. She bragged bulletproof windows were installed in her office, windows were installed in her office, windows were installed in her office, and she traveled with a full-time and she traveled with a full-time and she traveled with a full-time security detail. Theranos employees told security detail. Theranos employees told security detail. Theranos employees told us they were closely watched and us they were closely watched and us they were closely watched and required to sign non-disclosure required to sign non-disclosure required to sign non-disclosure agreements. All reinforced, they said, agreements. All reinforced, they said, agreements. All reinforced, they said, by a threatening team of lawyers and by a threatening team of lawyers and by a threatening team of lawyers and private investigators. private investigators. private investigators. That's why when Tyler Shultz alerted That's why when Tyler Shultz alerted That's why when Tyler Shultz alerted authorities in the spring of 2014, authorities in the spring of 2014, authorities in the spring of 2014, he used a fake name. he used a fake name. he used a fake name. >> Why did you come up with an alias? >> Why did you come up with an alias? >> Why did you come up with an alias? >> I knew how seriously Theranos protected >> I knew how seriously Theranos protected >> I knew how seriously Theranos protected their trade secrets. I knew they would their trade secrets. I knew they would their trade secrets. I knew they would not take it well if they knew that I was not take it well if they knew that I was not take it well if they knew that I was talking to regulators.

talking to regulators. talking to regulators. >> In his email to New York State >> In his email to New York State >> In his email to New York State Department of Health Regulators, Shultz Department of Health Regulators, Shultz Department of Health Regulators, Shultz outlined questionable lab practices and outlined questionable lab practices and outlined questionable lab practices and said he believed test results were being said he believed test results were being said he believed test results were being switched. switched. switched. >> I just said, "This happened in my >> I just said, "This happened in my >> I just said, "This happened in my laboratory, and I just want to know if laboratory, and I just want to know if laboratory, and I just want to know if this is okay." this is okay." this is okay." And they responded and said, "No, this And they responded and said, "No, this And they responded and said, "No, this is cheating. This is not how it's is cheating. This is not how it's is cheating. This is not how it's supposed to be done." supposed to be done." supposed to be done." >> Tyler Shultz was ready to resign, but >> Tyler Shultz was ready to resign, but >> Tyler Shultz was ready to resign, but first he sent Elizabeth Holmes an email first he sent Elizabeth Holmes an email first he sent Elizabeth Holmes an email about his concerns. He got a response about his concerns. He got a response about his concerns. He got a response from Sunny Balwani. from Sunny Balwani. from Sunny Balwani. >> that I was arrogant, ignorant, >> that I was arrogant, ignorant, >> that I was arrogant, ignorant, patronizing, reckless, and I was lacking patronizing, reckless, and I was lacking patronizing, reckless, and I was lacking the basic understanding of math, the basic understanding of math, the basic understanding of math, science, and statistics, that if I had science, and statistics, that if I had science, and statistics, that if I had any other last name, that I would have any other last name, that I would have any other last name, that I would have already been held accountable to the already been held accountable to the already been held accountable to the strongest extent. strongest extent. strongest extent. >> Tyler Shultz quit in April 2014, >> Tyler Shultz quit in April 2014, >> Tyler Shultz quit in April 2014, and soon after, Erika Cheung did, too. and soon after, Erika Cheung did, too. and soon after, Erika Cheung did, too. By February 2015, the Theranos fairy By February 2015, the Theranos fairy By February 2015, the Theranos fairy tale was about to unravel publicly. tale was about to unravel publicly. tale was about to unravel publicly. At the Wall Street Journal Pulitzer At the Wall Street Journal Pulitzer At the Wall Street Journal Pulitzer Prize-winning reporter John Carreyrou, Prize-winning reporter John Carreyrou, Prize-winning reporter John Carreyrou, who has written a book about the who has written a book about the who has written a book about the Theranos saga, got a call. It was a Theranos saga, got a call. It was a Theranos saga, got a call. It was a tipster casting doubt about the Edison, tipster casting doubt about the Edison, tipster casting doubt about the Edison, Theranos, and its charismatic founder Theranos, and its charismatic founder Theranos, and its charismatic founder Elizabeth Holmes.

Elizabeth Holmes. Elizabeth Holmes. >> She is a pathological liar. She wanted >> She is a pathological liar. She wanted >> She is a pathological liar. She wanted to be a celebrated tech entrepreneur. to be a celebrated tech entrepreneur. to be a celebrated tech entrepreneur. Uh she wanted to be rich and famous. Uh she wanted to be rich and famous. Uh she wanted to be rich and famous. And she wouldn't let anything get in the And she wouldn't let anything get in the And she wouldn't let anything get in the way of that. way of that. way of that. >> What kind of job did the board do in >> What kind of job did the board do in >> What kind of job did the board do in holding Holmes accountable? holding Holmes accountable? holding Holmes accountable? >> This is one of the most epic failures in >> This is one of the most epic failures in >> This is one of the most epic failures in corporate governance in the annals of corporate governance in the annals of corporate governance in the annals of American capitalism. They did nothing to American capitalism. They did nothing to American capitalism. They did nothing to verify that her scientific claims were verify that her scientific claims were verify that her scientific claims were true. true. true. >> Carreyrou's first article appeared in >> Carreyrou's first article appeared in >> Carreyrou's first article appeared in October 2015 October 2015 October 2015 and revealed Theranos did less than 10% and revealed Theranos did less than 10% and revealed Theranos did less than 10% of its tests on Edison machines. of its tests on Edison machines. of its tests on Edison machines. >> What do you think's going on here? >> What do you think's going on here? >> What do you think's going on here? >> Holmes struck back. >> Holmes struck back. >> Holmes struck back. >> This is what happens when you work to >> This is what happens when you work to >> This is what happens when you work to change things. And first they think change things. And first they think change things. And first they think you're crazy, then they fight you, and you're crazy, then they fight you, and you're crazy, then they fight you, and then all of a sudden you change the then all of a sudden you change the then all of a sudden you change the world. world. world. >> But skeptics were no longer buying the >> But skeptics were no longer buying the >> But skeptics were no longer buying the Theranos deception. Theranos deception. Theranos deception. >> What I'm showing you now is the result >> What I'm showing you now is the result >> What I'm showing you now is the result of hundreds of engineers and scientists' of hundreds of engineers and scientists' of hundreds of engineers and scientists' work. work. work. >> Holmes repeatedly insisted she would >> Holmes repeatedly insisted she would >> Holmes repeatedly insisted she would present proof at a major industry present proof at a major industry present proof at a major industry conference that her technology worked.

conference that her technology worked. conference that her technology worked. >> You can see the tray dropping into the >> You can see the tray dropping into the >> You can see the tray dropping into the detection module there. detection module there. detection module there. >> It was proof that never came. >> It was proof that never came. >> It was proof that never came. >> And the evidence that you presented fell >> And the evidence that you presented fell >> And the evidence that you presented fell far short of that. far short of that. far short of that. >> In 2016, after a series of surprise >> In 2016, after a series of surprise >> In 2016, after a series of surprise inspections, federal regulators shut inspections, federal regulators shut inspections, federal regulators shut down the company's laboratory, saying it down the company's laboratory, saying it down the company's laboratory, saying it posed immediate jeopardy to patient posed immediate jeopardy to patient posed immediate jeopardy to patient health and safety. Nearly 1 million health and safety. Nearly 1 million health and safety. Nearly 1 million Theranos test results were invalidated. Theranos test results were invalidated. Theranos test results were invalidated. >> Once she started using this technology >> Once she started using this technology >> Once she started using this technology on the blood samples taken from on the blood samples taken from on the blood samples taken from consumers in Walgreens stores, that was consumers in Walgreens stores, that was consumers in Walgreens stores, that was an unauthorized medical experiment. an unauthorized medical experiment. an unauthorized medical experiment. There's no other way to put it. There's no other way to put it. There's no other way to put it. >> Theranos was on the brink of collapse. >> Theranos was on the brink of collapse. >> Theranos was on the brink of collapse. Big-name investors found their stock was Big-name investors found their stock was Big-name investors found their stock was worthless. Education Secretary Betsy worthless. Education Secretary Betsy worthless. Education Secretary Betsy DeVos and her family and media mogul DeVos and her family and media mogul DeVos and her family and media mogul Rupert Murdoch each lost more than a Rupert Murdoch each lost more than a Rupert Murdoch each lost more than a hundred million dollars. hundred million dollars. hundred million dollars. Walgreens sued Theranos and settled for Walgreens sued Theranos and settled for Walgreens sued Theranos and settled for less than a quarter of their 140 million less than a quarter of their 140 million less than a quarter of their 140 million dollar investment.

dollar investment. dollar investment. >> Why do you think this was outright fraud >> Why do you think this was outright fraud >> Why do you think this was outright fraud as opposed to any other Silicon Valley as opposed to any other Silicon Valley as opposed to any other Silicon Valley startup that just wasn't able to deliver startup that just wasn't able to deliver startup that just wasn't able to deliver on lofty goals? on lofty goals? on lofty goals? >> Well, because she raised money, hundreds >> Well, because she raised money, hundreds >> Well, because she raised money, hundreds of millions of dollars, of millions of dollars, of millions of dollars, uh on the basis of this technology uh on the basis of this technology uh on the basis of this technology not only being ready and working, but not only being ready and working, but not only being ready and working, but being commercially rolled out. You're being commercially rolled out. You're being commercially rolled out. You're also lying to the public. You're lying also lying to the public. You're lying also lying to the public. You're lying to patients. You're lying to doctors. to patients. You're lying to doctors. to patients. You're lying to doctors. You're lying to regulators. Most people You're lying to regulators. Most people You're lying to regulators. Most people would call that fraud, as well. would call that fraud, as well. would call that fraud, as well. >> The Securities and Exchange Commission >> The Securities and Exchange Commission >> The Securities and Exchange Commission called it massive fraud when they called it massive fraud when they called it massive fraud when they charged Elizabeth Holmes and Sunny charged Elizabeth Holmes and Sunny charged Elizabeth Holmes and Sunny Balwani in March. Holmes settled the SEC Balwani in March. Holmes settled the SEC Balwani in March. Holmes settled the SEC case without admitting guilt and paid a case without admitting guilt and paid a case without admitting guilt and paid a half a million dollar fine. half a million dollar fine. half a million dollar fine. Balwani, who left Theranos two years Balwani, who left Theranos two years Balwani, who left Theranos two years ago, calls the SEC charges unwarranted ago, calls the SEC charges unwarranted ago, calls the SEC charges unwarranted and is fighting them. and is fighting them. and is fighting them. >> At its height, how much was Theranos >> At its height, how much was Theranos >> At its height, how much was Theranos worth? worth? worth? >> 10 billion dollars. There was a period >> 10 billion dollars. There was a period >> 10 billion dollars. There was a period of several months where it was more of several months where it was more of several months where it was more valuable than Uber, valuable than Uber, valuable than Uber, more valuable than Airbnb, more valuable more valuable than Airbnb, more valuable more valuable than Airbnb, more valuable than Spotify.

than Spotify. than Spotify. >> And how much is it worth now? >> And how much is it worth now? >> And how much is it worth now? >> Zero.