Elizabeth Holmes' judgment and the legal loophole for 'bankruptcy'

Elizabeth Holmes judgment and the legal loophole for bankruptcy

Conviction of a corporate official like Holmes for a crime against the public is fraught with obstacles, especially the need to prove intent, says Jacob T. Elberg, a former law professor at Seton Hall. to prosecute health care fraud at United States Justice. Department. "Knowledge and determination have been at the heart of our criminal justice system and not just results," he said, and this burden often poses a challenge to prosecutors seeking corporate officers. hold him accountable.

It was sensible for prosecutors to focus on financial fraud in Holmes' case, Elberg said, rather than on the patients who were deceived, because "there are clear black - and - white lies, and that's what That's a worrying feature for those who have seen this lawsuit as an opportunity to hold an founder to account for abusing public confidence.

When the decision came down, it was Alex Gibney, director of the Elizabeth Holmes documentary The Inventor, saying he was apprehended and annoyed by the message he sent. "In making the film, the bright red line was an utter immorality," he tells me over the phone. "They were putting patients at risk," he says. "I wouldn't be interested in telling this story if it was just about entertaining people of net worth - it has gone beyond moral limit."

In the end the arc test did not follow a similar statement. It may be naive to think that a courtroom is all about morality, or even social responsibility. Certainly, dozens of lawyers - whether general and district attorneys or class action experts - are thinking creatively about how the law will be applied to punish perpetrators. opioid manufacturers, fossil fuel companies, tobacco companies, and gun manufacturers for their social harms. caused. But these people tend to use civil law, which does not have the same secrecy requirements as criminal law.

With tech companies, it's even harder to hold them criminally accountable for the social damage that they do. For starters, these companies are often popular with the public and challenge allegations of harm by looking far away, at the happy place they lead us. They also benefit from being seen as tolerant - they do not dig wells, they tell us, they do not allow anti - vax people to spit. Perhaps the purpose of the crimes is to have a secret algorithm that seems to work itself. It’s a convenient separation, with technical capability from the decisions being made on their platforms. Perhaps this explains the feeling of helplessness that many of us have when it comes to the growing power of technology companies - we seem to be surrounded by victims, but crimes or criminals were never linked to the suffering. .

To change this direction - to protect the public as quickly as we protect investors - needs to rethink how we expect corporations and their officials to behave. We needed to expand the capacity of federal agencies such as the Food and Drug Administration to conduct the kind of in - depth investigation that could reveal the bad intentions of corporate officials. Furthermore, we could shift the status from criminal intent in these cases to something easier to prove, such as negligence, proposed by Senator Elizabeth Warren in 2022 as part of her Corporate Action Accountability Act.

The purpose of these changes may not have been to fill the prisons with more corporate officers, such as Holmes, but to point them out: When thinking about how you treat the public, be as respectful of the law as you would be. tu. when you request a major study from investors.

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