'Fraud is Not a Trade Secret': How a 27-Year-Old Blew the Whistle on Theranos
Now add to the crisis at Theranos the breakdown of a family.
In a twist that could be straight from the script of a daytime soap opera, the grandson of George Shultz, the former U.S. Secretary of State who has been a big supporter and director at Theranos, became a company whistleblower alerting a state regulator about questionable practices at the medical testing company, according to the Wall Street Journal.
Tyler Shultz said he tried to raise concerns about Theranos first with Elizabeth Holmes, the CEO and founder of the company. But instead he received a sharp rebuke from then-Theranos President Sunny Balwani.
The younger Shultz began interning at Theranos after meeting Holmes at his grandfather’s house near Stanford. George Shultz is a fellow at the Hoover Institution, a think tank at Stanford. The younger Shultz changed his major from mechanical engineering to biology to prepare for a career at Theranos.
Starting in 2013, Shultz began working full time at the startup, inspired by the firm’s vision of providing blood tests from tiny samples of blood drawn painlessly from fingertips.
But once at the firm, Shultz’s excitement quickly faded. He discovered that test results on the firm’s proprietary Edison machine varied widely for the same blood samples. He also claimed that Edison flunked the firm’s quality and control standards.
When Shultz wasn’t satisfied with the company’s explanations, he complained to New York state’s public-health lab, the first known regulatory complaint about Theranos and its lab practice.
He also complained to Holmes but heard back from Balwani, who was dismissive of his concerns.