The only way to disincentivize founders from lying to investors is to throw one or two of them in jail for doing so. And Elizabeth Holmes doesn’t count. The Theranos indictment is likely to have zero deterrent effect, because it’s clear that she’s not really being prosecuted because she lied to investors. That’s just the easy, prosecutorial low-hanging fruit. The real reason for the prosecution is that her activities were incredibly reckless and dangerous on a human level for thousands of patients’ health.
Felix Salmon
