Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Six years after her company's founding, in 2009, 25-year-old Elizabeth Holmes, founder and CEO of Theranos, a Palo Alto, California-based company that manufactured and marketed

Six years after her company's founding, in 2009, 25-year-old Elizabeth Holmes, founder and CEO of Theranos, a Palo Alto, California-based company that manufactured and marketed medical devices for testing blood, tolda small group at StanfordUniversity that her ticket to success was "conviction" that you could "make something work, no matter what." On June 15, 2018, Holmes and Theranos's former president Ramesh "Sunny" Balwani wereindictedon multiple counts ofwire fraudand conspiracy to commit wire fraud. According to the indictment, investors, doctors, and patients were defrauded. Holmes herself had falsely claimed in 2014 that the company had annual revenues of $100 million, a thousand times more than the actual figure of $100,000. Prosecutors claimed they had engaged in an "elaborate, years-long fraud" wherein they "deceived investors into believing that its key producta portable blood analyzercould conduct comprehensive blood tests from finger drops of blood." It was alleged the defendants were aware of the unreliability and inaccuracy of their products but concealed that information. If convicted, they each face a maximum fine of $250,000 and 20 years in prison.Normatively speaking, which actions should Theranos' board of directors have taken to provide good governance oversight and prevent this fraud from occurring?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Hospitality Management Strategies

Authors: Ronald A Nykiel, Ronald A CHE CHA Nykiel PhD

1st Edition

0130618764, 9780130618764

More Books

Students also viewed these General Management questions

Question

A greater tendency to create winwin situations.

Answered: 1 week ago

Question

Improving creative problem-solving ability.

Answered: 1 week ago