Theranos Didn't Just Harm Investors
Levine spends a good chunk of this engaging with Felix Salmon's Slate article about how many startups could be charged with wire fraud.But I think Salmon overstates his case and oversimplifies wire fraud and I'm a little surprised Levine, a lawyer, doesn't catch him on this.Salmon says wire fraud is among the easiest crimes to prove: everything is done by wire now, so "you show the lie, you show the wire, boom". But it's actually not enough to show a "lie" and then a "wire". Check out a federal court's model jury instructions for wire fraud. The burden on the prosecutor is higher than showing simple dishonesty; they have to prove "intent to defraud", which means that the accused had to have lied deliberately in order to cheat victims. There are, even in the jury instructions themselves, multiple mitigating factors for "intent to defraud". And, aside from that, there's a legal difference between that and wildly extrapolating from realistic revenue forecasts to irrationally high outcomes you merely hope could happen if everything breaks your way.I think you can make the case that Balwani and Holmes got indicted because their dishonesty was unusually brazen and directly connected to the business they were in. They lied about what they were doing in the (then) present tense. They didn't make simply make unrealistic forecasts or put the rosiest possible color on how their engineering work was going; they fabricated entire medical procedures.