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Illustration: Lazaro Gamio/Axios

Federal prosecutors on Friday charged Theranos founder Elizabeth Holmes and former Theranos president Sunny Balwani with 11 counts of criminally defrauding investors, patients and doctors.

The details: Criminal charges were expected for Holmes, who has yet to comment. She stepped down as Theranos' CEO while remaining chair of the board. Balwani is fighting the charges and said, via an attorney, he "looks forward to clearing his name at trial." We've posted the full criminal complaint.

Three reasons why Theranos matters, even for those who had no direct or indirect relationship to the company:

1. It changed biotech investing, by turning peer-reviewed science from a "nice to have" into a "must have." This isn't always be applicable at a startup's earliest stages, but life sciences VCs and private equity investors no longer accept corporate partnerships as substitutes for objective due diligence.

2. It increased skepticism of tech. Theranos was the biggest fraud in Silicon Valley's history, and was partially enabled by the "wow factor" of prior Silicon Valley inventions. If we all got a supercomputer in our pocket, who's to say we can't we have dozens of blood tests from a single drop? Theranos dimmed that credulous shimmer a bit, and helped set the stage for increased scrutiny of all sorts of tech company claims.

3. It created an unfortunate blame game. There has been tons written about how dumb the investors were. Or how obliviously obsequious the board was. Or how desperate the media was to put Holmes on a pedestal. And there is truth to all of it.

But a greater truth is that great grift looks obvious only in retrospect, as the startup world previously saw in lower-profile cases like Canopy Financial. Con artists knows which buttons to press and which to avoid. Where trust is assumed and where it must be obtained. Where the law can be used to their advantage. Theranos wasn't valued at $9 billion because everyone was stupid, but rather because those running the company were smart. At least for a while...

Go deeper

1 hour ago - Health

Pfizer-BioNTech: Booster doses more effective at blocking Omicron

Prepared doses of the BioNtech-Pfizer Covid-19 coronavirus vaccine in Germany on Dec. 7. Photo: Thomas Kienzle/AFP via Getty Images

Pfizer and BioNTech said Wednesday that two doses of their COVID-19 vaccine were significantly less effective at neutralizing the Omicron variant in early lab tests, but a three-dose regimen was more effective.

Why it matters: Omicron, which has been labeled a variant of concern by the World Health Organization after being identified by scientists in South Africa last month, has forced vaccine makers to reassess the effectiveness of their vaccines against this specific new form of coronavirus.

Mike Allen, author of AM
2 hours ago - Politics & Policy

Biden unveils "Building a Better America" branding

President Biden speaks on infrastructure while visiting a bridge in Woodstock, N.H., last month. Photo: John Tully/Getty Images

President Biden today launched a new website and unveiled bold new branding as part of a nationwide tour to sell the benefits of his infrastructure package.

Why it matters: The White House says passage of the new law shows the ability to "forge bipartisan consensus and prove our democracy can deliver big wins" even in these toxic times.

3 hours ago - World

Olaf Scholz sworn in as German chancellor, succeeding Merkel

Incoming German Chancellor Olaf Scholz is sworn in by Bundestag President Bärbel Bas in Berlin today. Photo: Sean Gallup/Getty Images

Social Democrat Olaf Scholz was sworn in as chancellor of Germany on Wednesday, succeeding Angela Merkel after 16 years and launching a new era of German and European politics.

Why it matters: Scholz, a center-left pragmatist who served as finance minister and vice chancellor in Merkel's last government, will lead Europe's largest economy in a coalition with the environmentalist Greens and pro-business Free Democrats.