SINGAPORE (June 18): “Fake it until you make it” is a mantra in the tech start-up world almost as old as California’s Silicon Valley itself. This region outside San Francisco is home to the world’s largest tech industry, whose iconic companies such as Apple, Facebook and Google’s owner Alphabet are now in a race to cross the trillion-US dollar valuation. In their formative years, many of today’s tech behemoths had no real business model, but with lots of venture capital money and hard work, they eventually morphed into some of the most profitable enterprises on earth.
Over the past decade, one ambitious young woman, Elizabeth Holmes, who faked blood tests at her start-up to produce supposedly revolutionary technology, just took it too far. This week, Theranos, as her fledgling medical device company that pretended to be a tech start-up in the Silicon Valley is known, starts its final round of layoffs, which is expected to lead to a formal liquidation of the firm by August.
In mid-March, the US Securities and Exchange Commission (SEC) charged Theranos and its high-profile CEO, Holmes, with defrauding investors. The SEC says Holmes raised more than US$700 million from investors through “fraudulent claims”. As part of a settlement with the SEC, Holmes has agreed to pay a US$500,000 ($667,552) penalty, give up majority voting control of the company and will be barred from serving as an officer at a public company for a decade. The US Attorney’s Office in San Francisco is looking to file criminal charges against her later this year.