They both committed fraud to their investors. I see that Adam Neumann is now wanting to buy WeWork. Why is he not in jail?
In: Technology
Their crimes are pretty different.
Holmes lied entirely about having a product. She didn’t have anything, at all, nothing she could sell. And she kept up that lie until it all crumbled around her.
Wework did have a working product that they got paid for. The problem with the business is it was financial unsustainable. This fact wasn’t really all that hidden though, Neumann and co certainly tried to play it down and to some degree you can get away with it by promising that much of the loss was due to trying to blitz scale and it will be profitable once scale was achieved. At the end of the day though they didn’t lie about the numbers, it was clear to everyone wework was very good at losing money and any future promises of growth aren’t fraud as they are clear speculation.
The one thing you could perhaps get Adam on and maybe he still will be caught for is self dealing, he had wework sign leases with himself on buildings he owned. However this was not covered up to investors and they approved it at the end of the day, they can’t really blame anyone but themselves for letting it happen.
At the end of the day wework’s investors knew what Neumann was doing and signed off on it. Neumann didn’t lie to them. You can’t have fraud without lying.
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