The SEC has made the choice not to require protections that would likely have avoided the Theranos debacle. The mostly super wealthy investors in Theranos made the choice not to protect themselves. Presumably, the SEC is lax in monitoring these private offerings because it believes that investors at this level have the sophistication and means to assure that they are protected from misstatements. There is no reason why there should not be significant disclosure and review requirements on companies such as Theranos, which at its peak was valued at $9 billion, when they are raising money. However, there are no similar requirements when a private company raises private funds from wealthy investors. When a private company decides to go public, the SEC subjects it to very strict disclosure and review requirements. The SEC has the power to act - to require such things as audited financial statements in appropriate circumstances, and to require review of offerings. The United States has a federal agency charged with the oversight and protection of investors: the Securities and Exchange Commission. What does matter is that in order to express outrage at perceived excesses, we are misusing the purposes and sanctions of the criminal law. Frankly, the terminology doesn’t really matter. The fact that she misled or outright lied to her backers is clear, and the discussion about whether there is a difference between lying and puffery has been exhausted and isn’t getting us anywhere. The jury found that she did not intend to harm or mislead providers and recipients of care, but she was found guilty on four counts of wire fraud for lying to and deceiving some of the smartest and most sophisticated investors in the world. On Monday, Elizabeth Holmes was acquitted on charges that she misled doctors and patients as she raised money for her blood testing company, Theranos. Elizabeth Holmes walks into federal court in San Jose in December, weeks before she is convicted of wire fraud.