Theranos—Theranos systematically misrepresented blood testing technology capabilities to investors and public
Theranos, led by Elizabeth Holmes and Sunny Balwani, conducted an elaborate years-long fraud claiming its proprietary Edison blood analyzer could perform comprehensive blood tests from tiny finger-prick samples. In reality, the device could only perform a small number of tests, and the company secretly ran the vast majority of patient tests on modified third-party commercial analyzers. Theranos falsely claimed $100 million in 2014 revenue when actual revenue was approximately $100,000, and falsely stated its technology was deployed by the US military in Afghanistan. The fraud raised over $700 million from investors.
Scoring Impact
| Topic | Direction | Relevance | Contribution |
|---|---|---|---|
| Consumer Protection | -against | primary | -1.00 |
| Corporate Transparency | -against | primary | -1.00 |
| Research Integrity | -against | secondary | -0.50 |
| Overall incident score = | -0.983 | ||
Score = avg(topic contributions) × significance (critical ×2) × confidence (0.59)
Evidence (1 signal)
Wall Street Journal investigation exposed Theranos technology fraud
John Carreyrou's October 2015 Wall Street Journal investigation revealed that Theranos was secretly using conventional blood testing machines for the vast majority of its tests rather than its proprietary Edison device, and that the company's technology could only perform a small fraction of the tests it advertised.