During the event, which was named ‘Fraud is Not a Trade Secret: A Conversation with Tyler Shultz’, the 30-year-old Stanford researcher discussed the importance of standing up to employers and institutions who engage in unethical practices.
The talk, which was delivered to an audience that included students from the Broad College of Business, was based on his own experience as former employee of Theranos Inc., a California-based biotechnology company founded in 2003 by the now-disgraced entrepreneur Elizabeth Holmes.
After dropping out of a Stanford chemical engineering degree aged 19, Holmes used her leftover tuition money to set up a blood-testing startup.
The company purported to be developing technology that would completely revolutionize the process of blood sampling by using smaller amounts of blood to test for a variety of diseases. The claims have since been proved to be fraudulent.
At its peak in 2014, Theranos Inc. was valued at around $10 billion, having received large sums of investment from business moguls such as Tim Draper.
That same year, Stanford biology graduate Shultz began working for the healthcare powerhouse.
While at the company, Shultz bore witness to several damning incidences of internal malpractice, which included lies being told to board members, a culture of secrecy and intimidation, technology that repeatedly failed quality checks, and false results being sent to patients.
He revealed this information to John Carreyrou, a twice-Pulitzer-prize-winning journalist, who published a series of hit pieces on Theranos in 2015 for The Wall Street Journal.
Although Holmes initially denied the allegations, she eventually stepped down from her role as CEO in 2018. The company was subsequently subject to a series of federal investigations that led to it being shut down just three months later.
Thousands of former employees, many of whom were unaware of the fraud, were left uncertain about their future.
In 2022, Holmes was found guilty on four charges of defrauding investors and was sentenced to 11 years in prison.
Addressing students and other audience members during the event, which was hosted at the Broad College of Business, Shultz revealed that being a whistleblower came at a great emotional cost, adding that he wouldn’t recommend it to everyone.
However, he stressed the importance of overcoming even small-scale ethical dilemmas, as they can teach people how to conduct themselves when greater challenges arise.
Shultz also added that it’s important for universities to display an example of ethical leadership to their students.