<instructions>Your goal is to analyze the following comment and estimate how highly it will be upvoted by the Hacker News community.</instructions><comment><author>c3534l</author><text>I had to go through a bunch of SEC cases for an accounting project a while back. One thing stood out to me more than anything: the SEC goes after cases that are easy more than anything else. Multiple crimes committed with lots of evidence and easy-to-spot damages. It actually gave me the impression that avoiding the ire of the SEC is relatively easy if you set your mind to committing fraud without getting caught.</text><parent_chain><item><author>prostoalex</author><text>I interpreted it somewhat differently. The money paragraph seems to be&lt;p&gt;&amp;gt; claimed that Theranos’ products were deployed by the U.S. Department of Defense on the battlefield in Afghanistan and on medevac helicopters and that the company would generate more than $100 million in revenue in 2014.  In truth, Theranos’ technology was never deployed by the U.S. Department of Defense and generated a little more than $100,000 in revenue from operations in 2014.&lt;p&gt;This was not even a forward-looking statement, it was an outright lie in the legal document.&lt;p&gt;One can do pretty much whatever they wish with accredited investors&amp;#x27; money, but it has to be disclosed in the PPM.&lt;p&gt;Even if you have a line item where all the money will be spend on CEO&amp;#x27;s dog&amp;#x27;s private jet travel, accredited investors who have reviewed and signed the PPM have no legal recourse.&lt;p&gt;In Theranos case it looks like a straightforward misrepresentation of facts, which is a red flag for SEC.</text></item><item><author>ChuckMcM</author><text>Ok, this is the money line in that press release for me:&lt;p&gt;&lt;i&gt;“The charges against Theranos, Holmes, and Balwani make clear that there is no exemption from the anti-fraud provisions of the federal securities laws simply because a company is non-public, development-stage, or the subject of exuberant media attention.”&lt;/i&gt;&lt;p&gt;For all those entrepreneurs are trying to &amp;quot;fake it until you make it&amp;quot; be aware that the SEC considers your strategy both fraudulent and they feel they have the jurisdiction to prosecute you. And while I doubt the SEC is going to go after every CEO that raised a Series A on a pitch deck that was pure fantasy, the people who participated in the round might bring them in if it served their purposes.</text></item></parent_chain></comment><story><title>Theranos, CEO Holmes, and Former President Balwani Charged with Fraud</title><url>https://www.sec.gov/news/press-release/2018-41</url></story>
<instructions>Your goal is to analyze the following comment and estimate how highly it will be upvoted by the Hacker News community.</instructions><comment><author>samfisher83</author><text>How do you not go to jail for this? This isn&amp;#x27;t fake it until you make it. This is massive fraud. 100 mil vs 100,000 is off by a factor of 1000.</text><parent_chain><item><author>prostoalex</author><text>I interpreted it somewhat differently. The money paragraph seems to be&lt;p&gt;&amp;gt; claimed that Theranos’ products were deployed by the U.S. Department of Defense on the battlefield in Afghanistan and on medevac helicopters and that the company would generate more than $100 million in revenue in 2014.  In truth, Theranos’ technology was never deployed by the U.S. Department of Defense and generated a little more than $100,000 in revenue from operations in 2014.&lt;p&gt;This was not even a forward-looking statement, it was an outright lie in the legal document.&lt;p&gt;One can do pretty much whatever they wish with accredited investors&amp;#x27; money, but it has to be disclosed in the PPM.&lt;p&gt;Even if you have a line item where all the money will be spend on CEO&amp;#x27;s dog&amp;#x27;s private jet travel, accredited investors who have reviewed and signed the PPM have no legal recourse.&lt;p&gt;In Theranos case it looks like a straightforward misrepresentation of facts, which is a red flag for SEC.</text></item><item><author>ChuckMcM</author><text>Ok, this is the money line in that press release for me:&lt;p&gt;&lt;i&gt;“The charges against Theranos, Holmes, and Balwani make clear that there is no exemption from the anti-fraud provisions of the federal securities laws simply because a company is non-public, development-stage, or the subject of exuberant media attention.”&lt;/i&gt;&lt;p&gt;For all those entrepreneurs are trying to &amp;quot;fake it until you make it&amp;quot; be aware that the SEC considers your strategy both fraudulent and they feel they have the jurisdiction to prosecute you. And while I doubt the SEC is going to go after every CEO that raised a Series A on a pitch deck that was pure fantasy, the people who participated in the round might bring them in if it served their purposes.</text></item></parent_chain></comment><story><title>Theranos, CEO Holmes, and Former President Balwani Charged with Fraud</title><url>https://www.sec.gov/news/press-release/2018-41</url></story>