Theranos Trial Reveals the Burden of Deception

Elizabeth Holmes—founder of the defunct blood-testing company Theranos—is in the midst of her long-anticipated trial ( for defrauding customers and investors. After raising nearly $1 Billion in venture capital, landing big customers like Walgreens, and assembling a board of powerful people like Henry Kissinger and Gen. James Mattis, the company fell to pieces in 2016 as the core technology proved to be a mere shadow of what was promised by Holmes.

There’s a lesson for everyone in this case and this story. It’s that, no matter how much energy or money we spend to hide it, the truth always wants to come out.

John Carreyrou (the Wall Street Journal writer who first revealed the truth about Theranos) has been following the trial. One of the new revelations is that the company apparently spent over $150,000 ( on private investigators to spy on two whistleblowers, Tyler Shultz and Erica Chung. This, of course, doesn’t include the huge fees of the lawyers paid to pursue the two in court. At no point did Shultz or Chung reveal anything about the company that wasn’t true. This was an expansive and expensive effort to prevent the truth from being known.

The burden of legal threats caused incredible stress for Shultz. Holmes and Theranos did all they could to make him miserable. Why did he insist on doing the right thing in the face of so much pressure? In a podcast interview with me (, Shultz said:

“It was just like that sneeze that I couldn’t hold in…It was like a compulsion. I just had to tell my story…I just felt like, “Why am I the one who needs to bullied into silence here? I’m going to stand up for myself. I don’t really care what the consequences are. I’m going to go. I’m going to go fight. I’m going to stand up for myself.”

And here’s the lesson for all of us. Hiding the truth about wrongdoing is expensive and hard. And the more you try to obscure it, the more truth there is to be revealed. As reckless as Holmes was in her promises about the Theranos technology, the efforts to cover the truth only compounded her culpability instead of helping her escape scrutiny like she’d hoped.

Of course, sometimes unethical or illegal behavior stays hidden, but not without imposing a miserable burden on everyone involved. It can’t be any other way. For any secret wrongdoing, the truth is “like that sneeze” that can’t be held in. We’ve seen it happen over and over, from Watergate to Weinstein. Each case is an example of massive, expensive, and ultimately wasted efforts to conceal the truth.

The best course of action is always to resist the urge to conceal or obscure. Take your lumps and find a way to make restitution, as we recommend in our book The Business Ethics Field Guide ( (The urge to hide wrongdoing is a common dilemma, one we call Repair.) If you do, you’ll save yourself and others from all kinds of misery and expense. And besides, it’s the right thing to do.