“Silicon Valley is a lot cleaner today than it was when I started, during the dot-com bubble of the 1990s,” said Reed Kathrein, a San Francisco attorney who sued Holmes and Theranos on behalf of Ms. to investors in 2016. “People are throwing money at these startups. Everyone thought they were going to win the lottery. It’s easier to be honest.”
Reforms prompted by the demise of WorldCom, a long-distance telephone company, and Enron, an energy company, in the early 2000s also had an impact.
“Some changes to the law, like the Sarbanes-Oxley Act, make it difficult for accountants,” Mr. Kathrein said. “They have to do their job now.”
Thirty years ago, the technology industry was as much known for its physical products as it was for software. Indeed, software used to be a physical product. If sales don’t go well, there’s a possibility of dumping.
MiniScribe, a Colorado disk storage company that had fallen on hard times, was taken over in 1984 by Hambrecht & Quist, prominent Silicon Valley financiers. The investment firm pumped money in and installed its own management board. In 1988, to maintain stock, MiniScribe managers packed 26,000 bricks into MiniScribe boxes and shipped them to Singapore. When the plan is revealed, the company goes bankrupt and the CEO goes to jail.
In this sense, Mr. Kathrein noted, Ms. Holmes’ case is a backlash. She was accused of making false and misleading claims to investors that Theranos’ proprietary analyzer, named Edison, was a medical wonder that could perform a full range of clinical tests. ready. It cannot.
“She was transporting bricks,” he said. An attorney for Ms Holmes declined to comment.
Mr. Kathrein’s conclusions are not widely accepted. When asked if tech people have become more honest over the decades, Margaret O’Mara, a historian of Silicon Valley, laughed.