Generally the FDA will give companies several outs to fix problems, they only bring out the handcuffs after several ratcheting steps (one of which includes bringing in a US Marshal and a team from the FDA, at your expense, to be at your business every day and tell you how to run your company).

These are rich powerful people, they don't go to jail.

Will anyone from a 10B startup go to jail ? Probably not, but we can schedule that for afternoon tea outrage.

But they do initiate investigations, and it is a crime to defraud or attempt to defraud the FDA. And if the FDA so chooses, they can forward their information to Justice and participate in the proceedings against the accused. They could provide the evidence of wrongdoing and increase the political pressure to act. They can do a lot to ensure that the state determines it has sufficient reason.

And Holmes and the board believed in good faith that their prothrombin test was accurate. No mens rea, no culpability. No prison for anyone.

And, there should be some civil remedy that costs Theranos big-time. Massive fines, one-site FDA overseers, etc.

That said, I don't think I'll be sending my bloodwork to Theranos any time soon. That's some scary stuff.

With that background, your faith in the system is touching but unwarranted.

I doubt this will result in jail time for the principles, but they should be expecting lawsuits over this.

You don't have to mean for something bad to happen to get jail time. You're still responsible for your actions, intentional or not.

I'm not lawyer, so bear with me, but my lay understanding is that if it can be shown that they should have been aware of the quality and other issues regarding their results, they could be criminally negligent. Feel free to correct me.

Think people dying when a building in disrepair burns.