Based on what I can gather Holmes should be in the next cell over from Shkreli.
4
Besides Holmes defrauding investors, patients were put at great risk due to wildly inaccurate blood coagulation tests being voided by Theranos. Physicians use these test results to quickly adjust the dosages of blood thinning drugs (anticoagulants). If they adjust the dosage based on erroneous data, the results can be fatal due to a blood clot or internal bleeding.
Also, consider Martha Stewart, who was jailed for far less than Holmes.
9
I do not want to excuse either of these crimes.
Shkreli was punished [despite what the official reason was] for raising to exorbitant levels the price of the drug.
The people he hurt with that price increase did nothing wrong.
While what Holmes did was a crime she basically hurt Wall Sreet gamblers.
How many of the Wall Street sleazebags who caused the 2008 crisis went to jail or were even prosecuted.
Note also the opposition of the financial community to a rule that financial advisors in retirement accounts put their client's interests first.
Note that fiduciary rule does not even address advice for non retirement investments.
1
David, Shkreli raised the price on insured drugs. He was merely helping along the pharma industry, business as usual. Nobody was hurt by this except wealthy investors, much like the Theranos case, except at a much smaller scale.
Well of course Holmes will not be sent to prison BECAUSE SHE IS A WOMAN! To jail her would be "sexist", because our corrupt political class now gives women all manner of privileges and get out of jail cards (because of the children) in order to buy their votes! Remember the hoax sex assaults on Ivey League campuses in the news for months? When the women were never charged and jailed for making false sworn statements that ruined men's lives. Just as with the millions of women who increasingly physically attack men and are never charged by DA's. While when the women can show tiny bruises, because men grabbed their arms to avoid getting their eyes gouged out or blocked the women's punches - the men they attacked are charged and their reputation ruined by "domestic abuse" on their official records. Or these women get big phony "abuse" settlements when they decide to divorce and go after more than half of the couples joint assets. But then this is all known. But most of the really rich guys that orchestrate what goes on in this society don't care because they benefit 2nd or 3rd hand from all these evil manipulations, and have big bucks for good enough lawyers to overcome the problem of the relatively diminished rights of common male citizens that they have engineered.
3
Different outcomes? Is it fair?
I have not followed this carefully, but my sense of the situation is that Holmes's problems are far from over.
The finances aside, when I read about Theranos, I was left scratching my head over the technology claimed.
And I only have a PhD in chemistry.
2
As many suggest, this saga is hardly over with. The layers of this fraud likely goes very deep. After all, the "warrior monk" Mattis wasn't made a Theranos director because of his keen insights into clinical chemistry. Nor were George P. Shultz, Henry Kissinger, and the rest of the carefully selected influence peddlers. This fraud seems to be a well orchestrated Ponzi scheme. It strikes me that an obtuse fantasist like Elizabeth Holmes, while clearly complicit in the fraud, was largely a puppet and part of the myth making apparatus.
1
Sounds like another case of "poor-innocent-lily-white-woman" who had no clue she was defrauding her investors, when she was in charge and knew exactly what was happening. And that's the NYTimes description. Why is she presumed to be unaware even when she led the company, in this article that posits a different Justice for her vs. Shkreli?
3
It will be one grave miscarriage of justice, especially for those who may have lost much of their life's savings, if Holmes is not prosecuted, for the outright fraud. Let her wear her black turtlenecks in jail, so the taxpayer can save money. Black is the New Orange.
5
The one in jail stole from the 1%. Just like Bernie Madoff. The one not in jail stole from the 99%. Our justice system.
7
John C. Coffee Jr., a professor at Columbia Law School who teaches classes on white-collar crime, said: “Typically you get more sympathy from the criminal justice system if you’re an attractive young woman than a brash, arrogant young male.”
5
Anyone aware of the realities of diagnostic testing knew that Theranos' claims were nonsense. The extraordinary part was that Holmes was able to deceive so many people for so long. That she belongs in jail is without question. Whether she winds up there is a question of how our dysfunctional legal system will function in her case.
4
Oh my goodness - JAMES B. STEWART says the US justice system isn't FAIR?!
Type it up in BIG LETTERS and print it on the front page.
Then try telling that to all of the poor people who have been incarcerated for their minor crimes while white collar criminals got away with ransacking the US economy.
Please Mr. Stewart - don't get me started!!
3
Shkreli was thrown to the wolves in the most public way possible - as a way to placate and distract the masses from the fact that his *real* crime (what he did with the drugs) was perfectly legal. His sacrifice allowed the industry to continue with the practice unbothered by talk of reform.
You can arbitrarily murder people for profit but you can't brag about it, Martin.
4
Right now there is someone on trial for selling bitcoin to a drug dealer in Arizona.
The drug dealer who bought drugs on the internet more than 50 times to resell them at school get zero jail time and get to go to school and 3 years probation to testify against the bitcoiner.
The bitcoiner could face jail time.
Happens all the time.
Even if she went to jail, wouldn't we all rather be in a female prison as long as their are only female guards. Friday jokes.
White collar criminals often fact little to no jail time. Holmes' actions caused vastly more harm. But let's face it, Shkreli was jailed seven years because he made himself into a public enemy with his outlandish behavior and raising the price of that medicine 5000%. The so-called victims of his fraud made a ton of money. He was convicted for lying to investigators but acquitted of the main fraud charges against him. His attorneys were right to expect anywhere from probation to 18 months in prison. Then he went and put a bounty on a lock of Clinton's hair, among other stupid stuff. He was punished more for who he was- bad pharmaceutical bro- than what he did. If Holmes doesn't face jail time- it will be for the same reason.
2
A week since the SEC action against Holmes? Let’s give this some time to play out before we clutch our pearls over the unfairness of the system. Perhaps the sex discrimination Mr. Stewart darkly hints at would be mitigated if there weren’t so few women in authority in criminal justice. Next problem?
I look forward to his many future articles on the more serious and prevalent problem of discrimination against women, of all colors. I’m sure he’s deeply concerned, as he’s jumped so quickly on this potential instance its naceancy.
1
Elena, if you haven't already, I implore you to explore the paper "Estimating Gender Disparities in Federal Criminal Cases" by Sonja B. Starr, University of Michigan Law School.
We're seeing fragments of a deeply embedded cultural problem that has existed as long as sexism itself. It is extremely dismissive of the men who have experienced firsthand the blatant prejudice against them in an eagerness to punish for you to attempt to say this problem could be easily solved and is not worthy of discussion. I am honestly deeply disheartened by your comment.
1
One is a criminal case, the other (so far) is not. It's not a fair comparison (yet). I wonder what voices from #metoo have to say about this? So far it appears that Shkreil is in prison for being a male, smirking (I can't seem to find that in case law), and Holmes is not because she looks good in a black turtleneck, and had A list (but yet perhaps duplicitous?) board. Life isn't fair? You want "Equal"? For that you'd best look in the grocery isle with sugar substitutes.
3
"Typically you get more sympathy from the criminal justice system if you're an attractive young woman ..." That man said that and the New York Times printed it???
They both belong in jail listening to the wu tang album on loop for the next ten years
The real question is whether Holmes' investors were all in on the scam in some way. I believe they all knew the whole thing was a fraud but believed they could use their combined power to skirt the law and overcome pesky regulatory hurdles. If you listen to any interview with Holmes, it's obvious within minutes she has no idea what she's talking about and is just obfuscating. To think that savvy investors would throw vast sums of money at this dubious project without any due diligence strains credibility.
My question is "how much money does Ms. Holmes walk away with?". Of the $700,000 she raised and the estimated net worth of 4 billion what does she still have. Defraud people, look good doing it, pay a pittance of a fine and Still walk away a multi millionaire. Doesn't seem right.
5
I also think this might be a result of differences in leverage - Holmes had something to bargain with and Shkreli didn't.
Shkreli's hedge fund went belly up; nothing left for him to bargain with.
Holmes still had 20 million shares and control of her company to bargain with, and apparently the investors think the company is actually worth something, so she perhaps used this as leverage to get out more intact.
It's the same strategy our beloved president followed in his bankruptcy in 1990 or so; rather than leave him in control of his companies to do whatever he wanted while litigation dragged on, companies agreed to let him keep a little bit of money in return for him giving up control immediately. It's the only reason he's not completely broke.
This is why it's really hard for white collar criminals to go to jail - they can bargain with the assets they control that they know they're going to lose anyway. It's a shame, but I'm not really sure what we can do about it.
3
Mr. Shkreli was convicted after trial. Ms. Holmes wasn't. Mr. Shkreli was prosecuted by the US Attorney in New York. Ms. Holmes was charged by the SEC's San Francisco office. Different prosecutors, different locales and, of course, different facts. Inconsistency should not come as a surprise.
2
And different plumbing systems ...
1
The real question is why Shkreli's attorney did not settle this thing out of court. Did he try and Shkreli just shut him down? He should have tried harder. No way I'd leave any type of financial crime to the fate of a jury of presumably average Joe's - especially after the '08 meltdown and the health care reform battles that served as a backdrop for Shkreli, his case, and his pricing policies as a pharma exec.
2
At least put Theranos in a country club pen for 5 years where she can play badminton and trade stocks from her dorm cell. It's sad. She'll probably go on to hoodwink more people whilst driving her Tesla around the Bay Area and eating chia cup power lunches.
11
I think smirk is the word of the day here. People tend to want to take a good poke at a smirking gob. But there is another difference between these two fruadsters, and that is the way the media portrayed them, from the get-go.
While Shkreli has always been described as a one-man show (a kind of riveting, evil genius), Holmes was presented as a somewhat insulated innovator who was swept up and nurtured by venture capitalists. An exotic hothouse orchid, tended to and protected by many, versus Shkreli’s prickly cactus standing alone. The acted upon versus the actor. Holmes came across, in all the reporting I saw, as managed. More spokesperson than leader. Sexism and optics played their parts in this, I am sure, but the differences between these two run deeper than gender and presentation. There’s a tendency in Silicon Valley for venture capitalists and major investors to capture and encapsulate people like Holmes. To grow the “unicorn.” It’s not clear how much Holmes knew about the depth of fraud at Theranos — when she became aware, or whether she was in on the deception from the beginning. (It’s just my opinion, but I think she was used, at least in the early days of Theranos.) Shkreli had no plausible deniability. He not only took ownership of his actions, he was proud of being that smart guy who played the system. So of course he got smacked down.
6
one of the differences is that Shkreli was a smirking, know-it-all who tried to game the system AFTER he was caught. Can you say SMACK DOWN?
4
The rich pay in fines what the poor pay in time.
6
"Some men will rob you with a knife or a gun,
And others with a fountain pen.."
“Typically you get more sympathy from the criminal justice system if you’re an attractive young woman than a brash, arrogant young male.”
In other words, you can catch more flies with honey than vinegar.
Mr. Shkreli is a patently unlikable, unsympathetic individual. Nonetheless, his case is irrelevant to the facts of Ms. Holmes'. Judged on the magnitude of the fraud, Holmes warrants a long prison term.
I was amazed how many top legal minds in law school were illiterate about science. Let me tell you something, I had taken courses like physiology, hematology, biochemistry, immunology, etc, and they were very, very difficult to master. Nonetheless, I was told to leave scientific decisions to attorneys and financiers who did not know tuna fish from guano.
The scientific method is how we as a society determine the truth. Somehow with the emphasis on business and profit, this methodology has been lost on people, even those in high places like those on the Theranos board of directors.
Is that hyperbole? Holmes erstwhile status as a billionaire says not.
6
Time for men young black men in particular to start a "me too" movement as it relates to
The criminal injustice system. Wonder if the media will give it such unquestioned credibility.
This article and most of the comments are premature. Let's see what happens.
4
Exactly Most people here are missing the point that SEC proceedings aren't criminal and the SEC can't put people in jail. Let's wait until the DOJ finishes its investigation and declines to prosecute before making all of these comments.
3
A statement in the article reads:
“Typically you get more sympathy from the criminal justice system if you’re an attractive young woman than a brash, arrogant young male,” (Professor Coffee) said.
So, yes, of course the two verdicts are fair.
1
One obvious difference is Shkreli’s arrogance and his pharma extortion history. But another is that Holmes was a woman STEM entrepreneur darling who was finally shaking up the male dominated medicine and business worlds. That’s why she got a LOT more attention, hype and sycophantic adulation than would any man in her position, and now people are loathe to punish her very much because that would recognize all the hype and adulation as just foolish falling for a crumbled facade of fraud and theft, which makes people very uncomfortable and plays very much against the current social push to advance women in science, STEM, and business.
5
A woman is beaten and abused by her husband for years and finally shoots him will likely get 20 years to life. A woman like Ms. Holmes who commits massive fraud--or most white collar criminals, for that matter--will likely pay a fine and walk.
4
She should not be spared jail just because she is young and pretty, or because her daddy is rich. She is just as sinister and greedy as Shekreli.
13
What’s a falsehood? Can you just come out and say lies instead? Don’t diminish the crimes.
3
Perhaps some difference is because of the direct harm to HIV and cancer patients who suddenly faced gigantic out of pocket costs for drugs previously available for decades for pennies and the glee Shkreli took in his acts. Perhaps none of this was to be considered in a securities fraud trial, but it is truly impossible to completely segregate the acts of an individual, particularly when that individual appears to remain proud of every dispicable act he has performed.
2
Shkreli is his own worst enemy. Still, I think there is another factor at play. The blogger Tyler Cowen talks about how different sub-groups of elites fight for status. In the last ten years, financiers have gotten down-statused, while techies have gotten even more up-statused. This probably explains a bit of the discrepancy.
3
I don't think the disparity in these sentences come down to gender discrimination. It's a question of perception and Shkreli is perceived to be a far worse person than Holmes. Both were convicted of financial crimes, however Shkreli first achieved infamy for gouging drug prices. The jury held him accountable for not only his financial indiscretions (which were far less serious than Holmes'), but for the (completely legal) outrage he instigated. This is on its face completely unfair, even unjust. However, that's human nature. And I, for one, am quite happy Mr. Shkreli is going to jail.
5
Mr. Shkreli made the mistake of saying publicly that he was not going to jail, before he was sentenced. His lawyers may have told him that in all probability he would not go to jail, but he was not suppose to say it publicly. That public statement, and the fact that he was nationally despised may have forced the judges hand. He was forced to give him a prison sentence so it would not seem like there was an arrangement.
4
A true entrepreneur is a natural skeptic and so good at failing that, when success finally comes, you know it's real. How anyone can live with the stress of being a fraud, yet presenting otherwise externally, I have know idea.
1
Shkreli showed contempt for the system and everyone in it. They always do worse when being sentenced than those showing even an iota of remorse. His acting job on the day he was sentenced was easily seen through by the Judge. Her act of giving him a tissue to dry his tears was, I believe, merely playing along with his charade.
Had he avoided jail time, he would have bragged about it outside the courthouse. He reminds me of the Andy Kaufman of finance.
1
Elizabeth Holmes did not thumb her nose at the system, but she defeinitely did not show remorse, at least from the many times I've seen her on TV perpetuating the fraud, over and over.
4
It's disgusting. She defrauded many people. Not even negligent misstatements of fact but intentional and willful fraud. She should be in jail.
11
white female privilege at it's best.
14
Wonder if anyone notified Martha Stewart...
8
The authors neglected to mention another variable: the defendants' last names: and if it had been Martin Holmes and Elizabeth Shkreli from Albania, perhaps the sentences would have been more on a par. After all, time has proven that race pays in the US (if you're on the right side of white).
7
I didn't know Albanian was a race. Down here, Martin would pass perfectly for white.
2
There are a lot of white crime fraudsters who are not in jail. I don’t believe Ms. Holmes “attractiveness” as much as not “daring” the SEC and then the courts to punish her.
Until he actually was found guilty and was on the verge of being sentenced, Mr. Shkreli did everything in his power to irritate all those who had Mr. Shkreli fate in their hands. Shkreli even managed to get his bail revoked. That takes some doing.
Maybe Shkreli’s personality is due to a rough childhood or maybe it’s due to a certain feeling he got that he’s so much smarter than anyone else and no one can touch him. His sentence and the charges against him - rare in the white collar crime world - aren’t due to being a white male as much as just being an ultimate jerk. The two aren’t necessarily synonymous despite the recent spat of news.
2
Could it be that Ms. Holmes Board of Directors at Theranos included: former Secretary of State George Shultz, William Perry (former Secretary of Defense), Henry Kissinger (former Secretary of State), Sam Nunn (former U.S. Senator), Bill Frist (former U.S. Senator and heart-transplant surgeon), Gary Roughead (Admiral, USN, retired), James Mattis (General, USMC), Richard Kovacevich (former Wells Fargo Chairman and CEO) and Riley Bechtel (chairman of the board and former CEO at Bechtel Group)?
Nope, you don’t go to jail if it’ll embarrass these sort of hogs at the feeding trough.
17
Where is the investigation and accountability of the board for the fraud? They violated "Due Care" in their board actions.
9
A piece of me thinks that Ms Holmes might actually have thought she could, eventually, develop the "one drop" blood test she had dreamt of. Whether her downfall was greed, naivety, incompetence, or the ominous pressure of already having lured so many investors we can't be certain. One thing is sure, once things got out of control, they got really out of control. When it became clear to her that she would not be able to "buy" any more time in her quest as opposed to when it became clear to her (if ever) that this was not going to work is the crux of the case and of the punishment.
Our government and private companies spend billions on research, product development, and testing that never results in a profitable outcome. One thing is for certain, there will eventually be "one drop" blood tests. If she did anything of scientific consequence, at all, it is to make us dream. Even dreams can sometimes be expensive.
1
I am so glad to see this article. When I first heard of her “punishment”, I thought it wasn’t even a slap on the wrist. And she didn’t even have to admit the allegations! Pathetic. Pure gender and looks discrimination.
8
The differences are easy to see. One has friends in high places and the other didn’t. James Mathis is apparently on the board of Theranos and almost got the fake blood test sold to the military.
So, this article is incomplete for not including that nugget for the NYT readers. The information is an easy google search away.
9
But do you believe Holmes knew the extent of the fraud? That’s the question that matters.
1
If we are young, white, beautiful, rich, healthy, and well connected, then the world is our oyster. There is a pecking order. Powerful rich white men and rich white women run the chicken coop. Power, wealth and beauty confer privilege. It's not mere culture. It runs deeper than that. It's how our species has evolved over hundreds of thousands of years. It's who we are.
5
He was an idiot who basically dared the system to send him away. A normal crook like him would not have gotten 7 years. Especially if his victims did get their money back. The conviction is more about him receiving justice for the people he overcharged. SHE on the other hand has done a lot of harm. Millions of blood tests invalidated? How many bad healthcare outcomes due to their services? Plus the investors. It is possible given the nature of the fraud that the board could be easily duped if she and her scientists lied to them. But If I am not mistaken, there were a lot of outside parties skeptical of their tech and the board likely should have considered the validity of that skepticism more carefully. In any case, there should face criminal charges brought here. I am surprised that Eric Schneiderman didn't do it yet. He seems to find a way around any impediment to jurisdiction when its politically advantageous to him. Must have been a New Yorker harmed here somewhere!
2
Mr. Shkreli should have been convicted for crimes committed against humanity but as strange as the American Legal System is, he was not. We all know that most Mafia figures were tried and convicted for tax evasion and lying under oath but that doesn't mean they did not commit those horrible crimes. Obviously so many hate the guy for his greed and pathological conduct. There is no comparison here with Ms Holmes. It is ridiculous to even complain that it was unfair.
2
Mr. Shkreli got what he deserved. If his antics influenced the jury, it was only to remind them that, given the far reaching consequences of their reprehensible actions, white collar criminals are sentenced way too leniently in this country.
So the answer is easy: no, it’s not fair, and Holmes should be in prison, too.
5
Could this be sexual advancement; or sexual harassment in reverse. Just because she’s a good looking female, she gets a pass. This phenomenon happens all the time, but flies under the radar. No female will ever advertise how she acquired a favor leveraging her sexuality.
3
May we compare Martin to Joe Manchin's daughter Heather Bresch, CEO of Mylan, who bought the rights to the epi-pen delivery system, jacked up prices from $50 to $600, defrauding gov't and insurers of millions, and limiting access to a drug that saves lives during severe allergic reactions? Heather's not in jail.
Unlike Martin, she didn't endure a Dickensian childhood of abuse. And she wasn't a genius. She didn't develop what appears to be a severe personality dysfunction. She was just greedy. Callous. Got a slap on the wrist.
8
Shkreli's arrogance was a taunt someone decided to "fix." When the court has your fate in its hands, don't smirk especially after you've raised your drug's cost by 5000 percent. I'll bet that by the time Shkreli got to prison, his wise guy routine was well known and, again, the "fix" was in place.
2
Until "white-collar" crime is penalized by jail time plus recompense equivalent to the ill-gotten gains... justice will not be served. Steal a loaf of bread and you end up in jail, steal a fortune and get your wrist slapped... American Justice 101.
17
If someone steals your phone from your parked car, they probably go to jail. Ms. Holmes and her fellow power/money hungry sociopaths are a thousand times more destructive in terms of people hurt, financial loss, etc. Lady justice is indeed blind.
15
Just because he was an irritating little so and so.
4
The "female sentencing discount" is a widely recognized (and studied) phenomenon. Men on average receive about 63% longer sentences than women convicted of the same offenses, and are twice as likely to receive sentences involving incarceration. The disparity between men versus women is six times larger than the racial disparity between black defendants and white defendants. If you want to receive a low sentence (or avoid prosecution altogether) being a woman is the single best factor to having going for you.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1985377
Of course, we don't hear much about this, because it conflicts with the standard theory of a "patriarchy" that systematically disfavors women vis-a-vis men.
30
RC has the best comment here.
4
Actually, it doesn't contradict notions about patriarchy, because in patriarchal societies, women are considered weaker. Because men have power, they need to be controlled; women, not so much. Women are "put on a pedestal" and assumed to have nurturing instincts. These may seem like benign stereotypes that provide some advantages (like getting off easier in jail time) but they still confine women to a narrow image. Also, it's harder for a woman to get to that level in business where she has the opportunity to commit widespread fraud!
2
Your link is to an article on racial disparities in sentencing. You're probably thinking of this 2012 study: https://www.law.umich.edu/newsandinfo/features/Pages/starr_gender_dispar.... Starr found that when men and women are convicted, men get longer sentences. However, her study was very broad and insufficiently granular.
A large body of research shows that women are far more likely to be convicted than men of the same crimes, especially major felonies such as homicide. Women are far less successful than men in claiming self-defense. See for example, the section in this article on men acquitted of rape and assault: http://scholarship.law.wm.edu/cgi/viewcontent.cgi?article=1003&conte.... And: “Battered Women, Homicide Convictions and Sentencing: The Case for Clemency,” Hastings Women's Law Journal, Vol. 18, No. 1, 2007: a study of all homicide convictions and sentences in Oakland County (MI) from 1986 to 1988 "revealed startling levels of discrimination against [female] defendants who were victims of domestic violence. [...] domestic violence victims had higher conviction rates (78%) and longer sentences than all others charged with homicide, including those with previous violent criminal records (62%). African-American women were convicted at a higher rate (80%) than all others." 75% to 80% of women who killed in self-defense are convicted or convinced to plead guilty, and are sentenced to long terms.
There is also substantial data on this from the UK.
1
Holmes has somehow managed to seem sympathetic, whether because of her gender, seeming innocence, or whatever. It should also be remembered that, at least in theory, she was trying to lower costs of medical services and he to raise them. It is hardly unusual for such factors to affect legal outcomes: just watch Law and Order, which won't be difficult, it's on all the time.
If by "seeming innocence" you mean white and attractive, then sure.
11
“Typically you get more sympathy from the criminal justice system if you’re an attractive young woman than a brash, arrogant young male,” he said.
Wait! Doesn't this statement go against all the identity politics, patriarchy, victim culture opinion pieces published in the NY Times?
11
The outlier is the Shkreli case, most white collar criminals are not even charged in this country, let alone prosecuted. Just look at the Trump, Kushner and friends, they continue to illegally use their positions for money making and nothing happens. They blame paperwork and other errors, errors that for you and me would me criminal charges, huge fines, loss of employment. Kushner has abused tenants in Baltimore and now its come to light that he also falsified construction permits to hound out rent controlled tenants, he also has repeatedly falsified his federal security paperwork yet he remains employed at the WH.
20
Yes Shkreli is a crook - as is Holmes. In Shkreli's case he seemed to have orchestrated this on his own. In the case of Ms. Holmes she had accomplices. Her board should certainly be held accountable as should the supposedly smart folks that funded her company. I would also suggest that other executives, technicians, etc who were aware of the fraud should be held accountable. It is time that we hold white collar financial crime up to at least the same level we hold bank robbery that happens with a note to the bank teller.
10
Maybe consider Theranos' Board? If she goes, then whose next? This is why she is not in jail.
The Board masqueraded her as the creative force, turtleneck and all.
7
Shkreli ripped off the wrong people (and not the public); Holmes' investors have a nice tax loss carry forward.
6
At least Schkreli had a product, Holmes appears to be the female version of Bernie Madoff, in what amounts to a massive Ponzi scheme to defraud Silicon Valley investors with no real experience in biotech.
In terms of gender equality, it can be argued she’s legitimately broken through the glass ceiling usually reserved for conniving male fraudsters...
19
It is not fair, but not surprising. Not a drop of sympathy for Shkreli, but she defrauded (= stole a lot of money from) a lot of people. Thieves like them -- and the other white-collar, rich and white heads of major financial corporations (like all those bailed out in 2009) should absolutely get stiffer sentences than the person who steals $100 from a gas station. The richer you are, the more your privilege, the whiter your collar, the more you steal, the worse your punishment should be!
6
Justice is anything but blind. That social fallacy is undermined daily as gender, race, socio-economic status, etc. dictate whether you go to prison more than the "facts" surrounding your case. The inherent flaw is that people are involved... as a species, we have certainly proven our inability to be objective. If we want true justice, i.e., fairness, maybe it's time to utilize AI as the means for criminal procedures, or know that it will never be fair.
2
It's called the "sentencing gap", something people rarely talk about in discussions of "equality" because this gap happens benefits women. Just as men are the overwhelming majority in terms of being victims of violent crime and of police brutality and killing, men are more likely to be sentenced, and to be given longer and harsher sentences, for committing the exact same crime as a woman.
17
"the "sentencing gap", something people rarely talk about in discussions of "equality""
Do you have any statistics, or are you just talking off the top of your head? Martha Stewart might disagree.
3
Using one individual to try and discredit an entire statistical trend? You could have easily googled "sentencing gap" in the time you took to reply, but here:
"If you're a criminal defendant, it may help—a lot—to be a woman. At least, that's what Prof. Sonja Starr's research on federal criminal cases suggests. Prof. Starr's recent paper, "Estimating Gender Disparities in Federal Criminal Cases," looks closely at a large dataset of federal cases, and reveals some significant findings. After controlling for the arrest offense, criminal history, and other prior characteristics, "men receive 63% longer sentences on average than women do," and "[w]omen are…twice as likely to avoid incarceration if convicted. This gender gap is about six times as large as the racial disparity that Prof. Starr found in another recent paper." - University of Michigan Law
7
The fact of these statistics is well known. But here is one study for you. Do some googling and you'll find many more.
""men receive 63% longer sentences on average than women do," and "[w]omen are…twice as likely to avoid incarceration if convicted." This gender gap is about six times as large as the racial disparity"
https://www.law.umich.edu/newsandinfo/features/Pages/starr_gender_dispar...
4
I would like to add one observation on Mr. Schkreli's case: when he was stealing from the hoi polloi by jacking up the price of essential medication to extreme levels, he was reviled by many, suffered no legal consequences, and some were even writing that he embodied the very characteristics that make America exceptional.
Mr. Schkreli's problem is that he went on to steal from the rich; this is never a good idea, even if you're White you can get actual jail time for messing with the wrong layer of our society.
29
Did you read the article? She stole from Murdoch and Ellison.
3
He broke no laws, America has no price control policies. Ethically despicable, but legally acceptable. But yet, he keeps being judged for that.
1
Comparing the outcome of white collar crimes is a fool's errand. Every case is unique and the results are all over the map. How about some reporting on how difficult the right wing supreme court has made white collar prosecution?
5
No, it's not fair. That said, Mr. Shkreli brought upon his harsh treatment. On the other hand, Ms Holmes, who should be behind bars and who should have to pay a huge penalty for her fraudulent activities, behaved like a 'nice young lady' in cooperating with the SEC.
Maybe this is Shkreli's "#MeToo" moment. I suppose that pendulum swings both ways.
6
“Typically you get more sympathy from the criminal justice system if you’re an attractive young woman than a brash, arrogant young male,” he said.
Yup, that sounds right. And not only in the justice system. Life is simply not fair.
That said, Mr. Shkreli's public persona was very much of his own making.
5
Jail. Jailjailjail. If police departments in major cities could stop gunning down innocent black citizens for a minute, they might notice that white collar crime is rampant, unchecked, and every bit as horribly damaging as breaking into a car or running a red light.
And that goes for judges and juries who dole out meaningless light sentences.
14
Holmes should be behind bars, but when the sitting Secretary of Defense was on your board (and flacking the product while he was still active duty), then it raises the issue of how far the culpability lies. Now if some of her victims decide to sue, she may well end up behind bars.
11
Ah, now Shkreli wants to reinterpret his former ideas of "fair" and "remorse"?
Did he care whether he was being "fair" when he jacked the price of a generic drug 8,000% so that patients who depended on that drug could no longer afford it? I think not. Shkreli not only got what he deserved, he was begging for it.
Shkreli is living proof that a high IQ is no guarantee that you won't grow up to be stupid.
As for Ms. Holmes, that is an entirely different crime and we can only hope justice will be served (and not on a silver or gold platter).
4
We already jail too many people. What possible deterrent value will sending this woman to jail have? Or Shkreli for that matter? They will both be rich when they get out.
Here's a thought: you want to end financial crime? Just take the guilty party's net worth to zero and ban them from all professional careers.
That will be a far more effective deterrent.
78
I’d normally agree, but the sheer amount of fraud demands some jail time. People are jailed all the time for minuscule property crimes and Martha Stewart was jailed for 10000k of insider trading. This woman not being a felon is unjust. I do agree with removing her assets, I don’t want her to be able to afford any comeback, especially in the political arena.
5
Right and wrong. Yes, we jail too many people, but we jail many WRONG people, for possession of and selling small amounts of drugs most prominently. We need to imprison the folks who steal money from us all!
4
No. Jail is the better deterrent. She needs to go to jail so others see what happens when you defraud investors. I'd much rather be free and broke than rich and in jail. It's a no-brainer.
2
The illustrator for the article, although placing Ms. Holmes in front of rather than behind the bars, has provided a subtle clue as to how apprehensive she might be over what could lie ahead for her. Her left arm is so twisted with anxiety that the thumb's down rather than up--biologically impossible (try it) but with a manifest implication.
Frankly, the following observation from this story says it all:
“Typically you get more sympathy from the criminal justice system if you’re an attractive young woman than a brash, arrogant young male,”.
If the woman involved had been plain, overweight or Martha Stewart, she wouldn't have been such a sympathetic figure. Those of us in the work force have long acknowledged this sort of bias. It won't matter how well we dress or articulate ourselves; given equal skills, the cute one always gets the job. Society wants to associate with beautiful people (of either sex, actually), which is also why Ms. Holmes was so successful at pitching her fictional product.
So when faced with a photogenic woman held up as the poster child for womens' achievement potential, especially in the sciences, justice must tread very carefully lest they be accused of using her as an example - 'don't be too good ladies or we'll knock you back a few pegs'. It's a hashtag campaign waiting to happen.
I, of course, am indulging in observations just as this article has. Ms. Holmes may yet be sentenced to jail time, her legal trials are not yet over.
12
Shkreli was convicted of felony fraud. Holmes was not.
Dan Kravitz
5
That’s the whole point of the article. Why was she not charged? There’s adequate material on which to indict her and charge her criminally, and then try and possibly convict her like Shkreli, yet she wasn’t charged (yet).
1
You state that there is adequate material on which to indict her. How do you know this? Do you work for the SEC's office in San Francisco?
Dan Kravitz
Nothing new here, Ferdinand Ward bilked President Grant and other well-known people out of a fortune in a late 1800s Ponzi scheme. And who can forget Madoff.
But Elizabeth Holmes is a woman. Inequality isn't always so bad, is it?
4
Thank you for writing this piece Mr. Stewart; it seems that the sentiment of the story has often been thought but rarely stated. I often wondered who was the bigger sociopath of the two-- the outright oddity who "had 0 respect for the law," or the "attractive young woman" who seems to have displayed more contempt by duping many more than mere investors. It also seems odd how few comments the story has garnered from the NYT usually effusive readers.
5
The worst thing that a white-collar crime defendant can do is put a human face to the crime and the circumstances around it. The complexity of the crime, the the defenses that can be found in abstract "that's the way business is done" arguments are usually enough to disassociate the defendant from the crime. The jury will know something illegal happened but usually won't be able to associate it with any one person "beyond a reasonable doubt".
Shkreli put an all too human and disagreeable face on his crime. The jury may not have understood the ins and outs of the crime but it could certainly spot a disagreeable, snide, arrogant individual and this influences everything else at trial.
At the end of the day, the criminal justice system is made up of ordinary people and they know from personal, visceral experience, from schoolyard bullies to bad bosses, what a "bad guy" looks like and acts like and Shkreli was, to them, one of the bad guys.
17
--Shkreli: graduate of Baruch College, City University of NY. Previous to that, a high school drop-out. Born in Coney Island Hospital to Albanian and Croatian parents. Demonstrated behavior: not nice.
--Holmes: attended Stanford U., “a member of the board of fellows of Harvard Medical School”, honorary degrees, Horatio Alger Award, positive-for-her magazine covers, blond WASP. Demonstrated behavior: nice.
Maybe she’s a “good ole boy” for the likes of the SEC, whereas with Shkreli’s background and demeanor, he’s not. Or, an SEC version of: “typically you get more sympathy from the criminal justice system if you’re an attractive young woman than a brash, arrogant young male,”
To 'jb's" comment here: The article makes the point that "it's unusual, though not unprecedented, for the SEC to settle a case while a criminal investigation is underway." So why did the SEC settle with her, when she apparently defrauded a number of people? We can only speculate, as this article does.
5
An African-American man was just shot in his backyard for holding a cellphone. Unfair is relative.
27
Nothing like a blonde in a black turtleneck to befuddle the senses of investors and prosecutors.
7
What is truly amazing is how an attractive young woman was able to bamboozle so many supposedly wise investors & advisors.
I guess that's an example of reverse gender discrimination!
8
I had an INR test of my warfarin induced level of anticoagulation at the VAMH Atlanta. Instead of a needle in a vein and a small tube of blood and a delay of hours for the results as it waited it’s analysis, there was but a prick of my finger and almost immediate results.
Back in Seattle when they withdrew blood, I asked why they did not use the pin prick instant test. “It is too unreliable!”
The dream may or may not have affected her trying to raise the money to further her technology. I would suspect that should be a factor. Many a professor and researcher with a Dream has fudged results and funding in their attempt to further technology.
On the other hand, if the results on INR are not accurate blood may form a clot in the heart or bleed in the kidneys or brain.
Perhaps a legitimate issue to have been explored is what was her lifestyle after she got the funding?
Instead of warfarin have you considered a direct oral anticoagulant?
Strange and unfair column. But will get attention for sure. Holmes' case will depend a lot on how aggressive companies that went "all in" on her claims, Walgreens, for ex, will pursue their rights. They spent a lot of money setting up blood test stations and so on. Also important: are there any patients who suffered from believing the results of her fraudulent blood tests? If so, such patients would have standing to bring both criminal and civil charges against her.
5
Given the sheer scope and audacity of Elizabeth Holmes fraud, which included threatening legal action against insiders and their families who questioned Theranos' technology or Ms. Holmes personally, it would be an extraordinary miscarriage of justice if Ms. Holmes did not face prosecution. Ms. Holmes cannot hide behind even a fig leaf of plausible deniability, as do so many other corporate leaders who allow fraud to take root in their organization, as it is clear she knew her technology did not yet work. The idea that she could yet walk away with millions after blatantly lying to investors and the public is vulgar, and if she avoids prison, it will be a result of our culture's unwillingness to imprison white women for criminal behavior.
14
Well, this story of fraud has been coming out for a while. A couple years ago I said to myself, "I don't see how this person avoids prison." I still can't fathom it. In order to promote fairness and consistency, the feds should charge her, unless there is some complexity we don't know about, which the article of course also accounts for.
6
Marx’s prediction that capitalism would destroy itself may be coming true. Shkeli & Holmes could argue that they were confused by ‘alternative facts’, like a major political party & our chief executive. Under these circumstances, do we have a future?
11
Hey James:
Apple to orange comparisons are usually flawed as is the the analysis in this Common Sense column.
Civil SEC enforcement actions don't put folks in jail, federal prosecutions do. Get back to us after the US attorneys make a decision, and if it is to prosecute Ms. Holmes, after her sentencing. Then the outcomes can be compared.
For my money she’s facing much longer jail time than Shkreli, especially if investors are left holding a 700 million dollar bag, sort of like a mini Madoff.
21
White collar criminals are treated very unfairly in this country, in that most don't face jail time. Ms. Holmes seems to warrant possible jail time.
For instance, Martha Stewart went to jail for insider trading on $200,000 of stock, yet Carl Icahn just dumped $31M in steel-related stocks right before Trump announced tariffs a couple of weeks ago.
Icahn is close with Trump and the timing is too good to be true, but Icahn will get away with it.
And then there in the financial meltdown of 2008 where not one banker went to jail for one of the worst financial meltdowns in our history.
Exhibit A is Angelo Mozilo, the head of Countrywide. There was sufficient evidence of Mozilo's knowledge of -- even his direction of -- Countrywide's fraud and criminal behavior. This knowledge made him accept a $67 million settlement with the Securities and Exchange Commission.
That deal was laughable. First, Bank of America picked up most of the tab, which meant that Mozilo paid only $22 million. Second, because even if Mozilo had paid the full amount, it would only have been about half of the $132 million he took home in 2007.
This should be a weekly column in the NYTimes, i.e. our two-tiered justice system of white collar crime where people are allowed to pay fines for criminal behavior without doing any time, but other people go to jail for low-level crimes.
126
Ms. Stewart went to jail for lying, not for insider trading.
1
Sending Martha Stewart to jail was one of the great miscarriages of justice in modern times. We punish those we don't like, for whatever reason, and let others slide. It makes our judicial system cruel, capricious and less effective. I think the statue of Justice should be recast, with one eye peeking out under her blindfold and one hand in a thumbs up.
Great idea: a regular column on the 2-tiered justice system. Hopefully, someone gets inspired...
1
To date I have found both Shkreli and Holmes to be contemptible. Perhaps something will come out about the Theranos case that will change my view of Holmes. Overall IMHO most perpetrators of white collar crime, be they individuals or corporations, receive sentences that are not proportionate to the magnitude of their crimes, they get off too easy.
16
Currently in our society, there seems to be a massive competition for "most loathsome", "most vile", etc. When push comes to shove, character counts. Shkreli has none. Let him rot.
3
Unsurprising. Women as a whole are treated much more leniently by the criminal justice system than men, a fact that most "me too-ers" and hardline feminists ignore
6
According to the National Coalition Against Domestic Violence:
- Women receive harsher sentences for killing their male partners than men receive for killing their female partners.
- The average prison sentence of men who kill their female partners is 2 to 6 years.
- Women who kill their partners are sentenced on average to 15 years, despite the fact that most women who kill their partners do so to protect themselves from violence initiated by their partners.
4
The study by Professor Sonja Starr, "Estimating Gender Disparities in Federal Criminal Cases," found that "men receive 63% longer sentences on average than women do," and "[w]omen are…twice as likely to avoid incarceration if convicted." I think well researched study carries more weight than an unsubstantiated claim by a non-profit activist group.
6
I hope this is only because the Justice Dept hasn’t dealt with her yet; Holmes should absolutely face jail time - her unreliable equipment could have killed patients, and she actively defrauded investors
122
Shkreli's fault was to gloat on TV when everyone was angry at the drug companies. His jail time has nothing to do with drug pricing but no one cares, he's a perfect scapegoat.
7
If she did what is alleged..and does not end up in jail, then I am not sure why we bother to have laws around fraud.
The good news of she does not go to jail would be that Sessions would have more jail space to lock up the real criminals - you know, those inner city pot dealers.
16
And obviously Elizabeth Holmes had something to hide. She threatened to sue the Wall Street Journal once she realized they were on to her. Luckily the journal continued with their reporting.
https://www.vanityfair.com/news/2016/05/theranos-silicon-valley-media
22
Easy, she is a woman and carry the white woman privilege! starting from everybody were so desperate for her to succeed and fail to do simple check, the fraud uncovered since 2015 and yet she still walk and even if she get charged then she will get light sentences for been white woman with blue eyes.
6
Having read the SEC's allegations and apparent proof against the Theranos principals, as a former frauds prosecutor in two large US Attorneys offices, I would be shocked if criminal prosecutions were not forthcoming, absent a compelling showing by defense counsel that the lies/misrepresentations were made in good faith and with no intention to defraud. Federal prosecutors generally have no requirement to explain publicly why prosecutions are declined, or even acknowledge that an investigation exists-much less go into detail about the proof or lack thereof in a particular case. The Theranos people appear to have been caught red handed with their hands in the till, as it were, and really had little option but to "cooperate with investigators" and capitulate civilly.Given the size of the evident losses here, and the broad range of victims, it seems to me that an explanation from the appropriate Justice Department officials ought to be forthcoming if no prosecution occurs.(I am not holding my breath, however.) The "cooperation with investigators" and any mea culpas issued so far, are more relevant for determining the length of any sentences, in my view, than in ascertaining whether a crime occurred. We have no choice but to hope that journalistic attention to the outcome remains steady, so that the public can ascertain whether the same standards are applied to the Theranos principals as were applied to Shkreli. It's all supposed to be about "equal justice under the law", no?
25
"It's all supposed to be about "equal justice under the law", no?"
The operative word is "supposed." Notwithstanding what is taught in law school, the justice system is unfair and unjust. The subject of this piece is just one example of a lesser crime yielding a more severe punishment. The system is rife with inconsistency, coercion (plea deals forcing innocent to take the lesser chance), and poor quality control. With these standards, someone IRL who actually produces a product would be out of business in no time flat.
Her lack of a prison sentence was determined a long time ago..Christian Holmes IV's (daddy) political connections guarantee she will never be charged though her crime is much much worse than Martin's. The father of a janitor can't expect the same treatment from the SEC as the daughter of an Obama donor. This is America and justice has nothing to do with the crime or your actions and everything to do with your families money, power and influence.
35
"Judge Matsumoto said it didn’t matter that Mr. Shkreli later repaid the investors he defrauded, or that some of his investors made millions."
I don't quite understand. It seems to me that this is all that matters ...
5
Its the difference between accepting responsibility and settling with the government and fighting them in a trial. Its almost invariably true that if you go to trial and lose you will spend more time in jail than in settling with them. Martha Stewart was offered a non jail time deal which she rejected.
6
Perhaps, with time, the outcome of the story will be more equal.
One can only hope.
28
Just off the top of my head one major difference is she seems to have corporated and he put up a big fight that tends to be found on also there are criminal charges still pending against her
3
It seems odd to me that you're comparing outcomes when Holmes may, as you say, still face criminal charges. Her outcome is far from settled, yet you write an article decrying her not having been sentenced to prison. Fear not, dear sir, the lady may yet be caged; hold your applause till the end. That aside, to compare two cases as though they are identical when they aren't, of course, is a rather useless exercise--not that I am proffering an opinion on the right outcomes myself, as--like you--I lack the information to do so. I assume a jury may well in due course determine what punishments should be assigned. Finally, this Shkreil fellow has a history of various malfeasances and anti-social behaviors which indicate that he cares little or nothing about the norms of our society and/or is gratuitously willing to do harm, even soliciting assault, as I understand it, even while on bail awaiting sentencing. His clear belief that he has the right, as a superior being, to do harm to others is in fact salient to predictions of his potential acts as a free man. In short, your article pulls forth a superficial comparison, pretends that matters are settled that are not, and is of little worth at all. I really have given it more attention than it's worth, so will stop here.
44
Bravo, jb. You have it exactly right. Thank you for writing this so eloquently, so I don't have to try.
4
Agree. And as a commenter already mentioned, Martha Stewart was jailed for lying to the FBI, not even using insider trading. But in either case, it seemed she was treated unduly harshly because she was a well known woman. And the article which posits a young woman not going to prison when she hasn’t even gone to trial is just a mental exercise to prove a point that does yet have basis in reality.
1