Huge news hit today as Theranos, its Chairman and CEO Elizabeth Holmes and its former President and COO Ramesh “Sunny” Balwani were charged with “elaborate, years-long fraud” by the Securities and Exchange Commission. The litany of supposed violations of the Securities Act of 1933 and the Securities Exchange Act of 1934 are almost as dizzying as the detailed factual allegations of repeated, willful fraud perpetuated by Holmes and Balwani on investors who likely should have known better.
Reviewing the SEC complaint against Holmes, it’s stunning to see the extent to which Holmes and Balwani were able to pull the wool over investors’ eyes. The highlights of the SEC allegations include:
Two months ago, I wrote about the potential impact of the Amazon purchase of Whole Foods on grocery prices. Both here and in the Boston Globe, I hoped and predicted that Amazon would use its famed distribution network to drive down prices on the healthy and organic foodstuffs that made Whole Foods famous.
I’m happy to say that I was right. Today, on Day 1 of Amazon’s official ownership of Whole Foods, Americans got to see the first tangible impacts of Amazon ownership and, as predicted, it was lower prices. As noted by journalists, the chain once derided as Whole Paycheck should now be referred to as “3/4 Paycheck” given deep discounts averaging 25% on a wide range of products ranging from bananas to butter.
Though terrifying for Amazon’s competitors such as Kroger, Walmart and Costco, Amazon’s major foray into brick-and-mortar groceries may end up being a boon for consumers – at least in the short term. It’s no secret that Amazon retains its web startup mentality in aggressively promoting loss leaders to drive out competition. And increased competition will better serve consumers who have been squeezed by recovering inflation on food prices.
Soon, Amazon intends to install more of its Amazon lockers into Whole Foods locations, thereby facilitating deliveries for goods bought on the Amazon website while also increasing foot traffic to its stores. Analysts also speculate that Amazon’s grocery delivery service, Amazon Fresh, may get a much-needed shot in the arm with goods from Whole Foods. The corporate synergy of this deal is palpable – and just beginning.
This makes people nervous. Already, journalists and think tanks have sounded alarms about how Amazon’s growing power may make it a monopoly. They argue that Amazon is an antitrust problem given that it already captures nearly half of U.S. online sales, is the leader in providing cloud computing through Amazon Web Services and has a robust marketing and logistics division.
To bolster their point, it is true that Americans can now spend a large part of their day using Amazon services without even knowing it. You could wake up on a Saturday, go to Whole Foods for groceries, order supplies off Amazon, read a book with your Kindle, watch TV on Netflix (powered by Amazon Web Services) or catch a movie on Amazon Prime Video. All of your needs met by Jeff Bezos and company.
Picture this. Amy becomes pregnant while working as a high school teacher. Her employer’s health insurance plan pays the maternity bills and she happily raises her twins.
Fast-forward a few years. She’s decided to become an entrepreneur and runs a small business. She becomes pregnant again but, this time, finds that her $400 a month individual health insurance policy won’t cover the expenses. In fine print, she discovers that she needed to purchase a special rider to activate maternity care benefits. She’ll have to pay $10,000+ out of pocket now, putting her burgeoning business at risk.
Angry at this, Amy decides to switch insurers but, to her dismay, she finds that the four largest insurers in her area don’t cover most expenses associated with a normal delivery. Amy has nowhere to go. Also, since pregnancy is a pre-existing condition, Amy is advised by her doctor to “not become pregnant again” if she wants to get quote reasonable health insurance rates during her search.
This is not an exaggerated or dystopian situation, it’s a real example from 2010.
You can find the full text of the Senate Bill here.
Following is the Senate Republicans summary of their Obamacare replacement bill, with comments by NYU’s Jason Chung.
Seven years ago, Democrats imposed a risky health care experiment on Americans that led to skyrocketing costs and collapsing insurance markets. Senate Republicans are working to fix the mess Democrats made by acting to rescue the millions trapped by Obamacare.
Jason Chung: While Obamacare has been largely successful in its aims to get millions of uninsured Americans medical coverage, including low-income and those with pre-existing conditions, it has also thus far failed to rein in premiums. Some of that can be attributed to Obamacare failing to institute a public option, which would charge premium lower by 7% to 8% according to the Congressional Budget Office.
This is a nuanced position. One can support former President Obama for extending coverage for up to 17.7 million more people and criticize him for failing to account for or communicate the possibility of rising premiums in an unchecked for-profit health insurance model.