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Matt Levine

Theranos Could Use Some More Money

Also taxes, CDS, Bitcoin cash advances and ICO regulation.

How's Theranos doing?

A well-known fact of securities fraud is that it creates valuable mailing lists. If you come into possession of a list of people who have been defrauded before, there is a good chance you can find a way to defraud them again. This is perhaps a little counterintuitive -- they were just defrauded; shouldn't they be on guard for more frauds? -- and you need to be a bit thoughtful about how you defraud them again, but there are effective approaches. (Not legal advice!) "We will recover the money that those fraudsters took from you, for a modest up-front fee" is a popular one; "sure the investment those fraudsters sold you is worthless but with a little more money we can find a way to make it pay off" is another. The bet, and it seems to be a good one, is that the personality traits that led people to be defrauded in the first place are more powerful than the lessons that they drew from the experience.