The most epic failure of corporate governance in the annals of American capitalism perhaps?

The Theranos deception.

How a company with a blood-testing machine that could never perform as touted went from billion-dollar baby to complete bust.

Elizabeth Holmes was just 19 years old when she dropped out of Stanford University with a dream of creating a company that would revolutionize blood testing. She founded the start-up Theranos and boasted her technology could take a pin-prick worth of blood from the finger and perform hundreds of laboratory tests. It was, she claimed, “the most important thing humanity has ever built.”

At its zenith, Theranos was worth nearly $10 billion and Elizabeth Holmes became the youngest, self-made, female billionaire in the world.

Elizabeth Holmes on “CBS This Morning”: “Our work is in being able to make testing more accessible.”

Elizabeth Holmes built her company Theranos on this invention she named the Edison. A miniaturized blood analyzer that would disrupt the $60 billion lab testing industry dominated by giants LabCorp and Quest Diagnostics.

Theranos raised nearly $900 million from those investors who now say they were swindled by Elizabeth Holmes and company president Ramesh “Sunny” Balwani. The pair claimed in investor documents obtained by 60 Minutes that Theranos technology was validated by the FDA, pharmaceutical companies, and was deployed on the battlefield by the U.S. military in Afghanistan. Those claims were fabricated.

She was also, as the Wall Street Journal uncovered, at the center of a massive, multi-year fraud.

(This article was first referred to in the Boards and Advisors Group on LinkedIn.)

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