Reference no: EM133415869

Assignment:

Sometimes, if it sounds too good to be true, it proba­bly is, as is the case of Elizabeth Holmes. She was found guilty on four of the eleven charges brought against her when she claimed to have "revolutionized" blood testing and defrauded her investors, who hoped to make mil­lions from her business, Theranos Inc.

Holmes claimed that an array of diseases could be diagnosed with a single drop of blood from a patient. Of course, innovative technology such as this would not only modernize medicine but would create incred­ible cost savings and bypass the traditional practice of drawing vials of blood from a patient. Millions of dollars were invested into Theranos almost overnight. Holmes became a billionaire. She was on the cover of many pres­tigious magazines and touted for her entrepreneurial leadership. However, this all came crashing down when, in 2015, The Wall Street Journal exposed the truth about Theranos. There was nothing "new" about the technology Theranos was using; the company was simply using tra­ditional machines for testing blood.

While Holmes claims that she never meant to mis­lead anyone, she was "charged by federal prosecutors with nine counts of wire fraud and two counts of conspiracy to commit wire fraud over allegations that she deceived investors and patients with her company's failed blood-testing technology. Each count carries a maximum sen­tence of 20 years in prison." (Full story in the research below.)

QUESTIONS:

1. What is the doctrine of egoism and how does this doctrine relate to this case?
2. While what Holmes did was wrong, could she have felt that she was acting in an ethical manner while still ignoring blatant wrongs? How could this be possible, or is there no way to justify her behavior? Explain your answer.
3. In what ways did Holmes break a social contract with her investors, her employees, and society at large? List each one and explain each in detail.
4. With respect to the investors, is this a matter of caveat emptor? Should they have done a better job of vetting the claims made by Holmes instead of being motivated by greed? Explain and justify your answer.
5. While Holmes claims that she never meant to mislead anyone, according to the record, she was "charged by federal prosecutors with nine counts of wire fraud and two counts of conspiracy to commit wire fraud over allegations that she deceived investors and patients with her company's failed blood-testing technology. Each count carries a maximum sentence of 20 years in prison." In legal terms, what does "Ignorance of the law" mean? What duty did she have to her investors, employees, and society?
6. Do you believe that it was never her intent to mislead anyone? Why or why not?