A woman in a black blazer stands next to a wooden podium as she speaks.
Meleck EldahshouryDaily. Buy this photo.

About 60 University of Michigan students and community members gathered inside Palmer Commons Friday afternoon to hear from Erika Cheung about her experience at Theranos, a health care startup company whose fraudulent activity was exposed when Cheung leaked reports about the company to authorities and to the Wall Street Journal investigative team in 2015. 

Cheung helped reveal Theranos founder Elizabeth Holmes’ false claims about the accuracy of her company’s blood testing technology. Holmes exaggerated the efficacy of the machines Theranos used to test blood samples and also inflated revenue on financial reports. Holmes was charged with fraud in 2018 and convicted in January 2022, before being sentenced to more than 11 years in federal prison.

The event was part of the Rackham Graduate School’s Gupta Professional Ethics series aiming to foster conversations about research ethics among U-M students.

In an interview with The Michigan Daily before the lecture, Laura Schram, director of professional development and engagement at Rackham, said she felt Cheung would be a great candidate to participate in the event series because of her experience working in an unethical research environment and speaking out against it.

“This speaker series enables us at Rackham to broaden our focus in supporting scholars … to build their professional ethics knowledge and skills beyond just thinking about research ethics,” Schram said. “The team just loved the idea of hosting Erika because we knew she would resonate with students given she made such bold ethical decisions so early in her career.”

Prior to her remarks, Rackham hosted a private lunch with 30 selected graduate and undergraduate students where Cheung answered questions about ethical dilemmas in academia and research-related industries. Schram said the smaller-scale event was designed to further engage students in discussions about their challenges in navigating and addressing research problems in their areas of expertise. 

“I thought the students would be eager to connect with (Cheung) on a deeper level to talk about ethical dilemmas and questions they’re wrestling with as young people,” Schram said. “She was very involved in collaborating with us … (and) was really interested in hearing from the students about the kinds of ethical challenges that they’re wrestling with right now.”

Cheung began the keynote lecture by discussing the first signs she noticed of the company’s questionable ethical behavior, which included falsified data from blood samples in order to maintain an image of success. Cheung recounted raising her concerns to former Theranos president Ramesh “Sunny” Balwani, who she said belittled her for questioning the validity of the data. 

“At that point, I was a bit naïve in thinking that there was some sort of chasm between what was happening at the operational floor and what was happening at upper management,” Cheung said. “But this tipped me off to the fact there was something nefarious.”  

Cheung said she resigned from Theranos and reported the falsified data to the Centers for Medicare & Medicaid Services in 2015 because she felt she could no longer work for a company that lied to their clients, especially about something as important as their health. 

“The fundamental thing was about responsibility,” Cheung said. “It was about understanding that even though it was a tiny vial of blood, every vial was a person … It was so clear to me that whoever this was could have been someone I knew.”

Cheung said as technology continues to advance, she believes it is more important than ever to know how to identify and prevent corporate misconduct. 

“Really thinking about how we instill ethical culture within these innovations is going to be crucially important especially because (of) the stake at which each of these new innovations have in all of our lives,” Cheung said. 

Engineering junior Michael Loftus attended the private lunch event and told The Daily he hopes to apply Cheung’s advice about prioritizing ethics to his own health care start-up company. 

“I was able to ask her a question about where marketing and putting on a good front, which is an important part of business, goes too far and turns into fraud,” Loftus said. “This is a perfect opportunity to meet (Cheung) and learn about an experience that I think would really be helpful to remember for my own company and for life in general.”

Rackham student Hojae Lee told The Daily she attended both the lunch and the main event because she feels it is important to remain aware of the ethical challenges that may arise throughout her academic and professional career.

“I just want to think about this so that when I have my own lab, I don’t want to create an oppressive environment where people … would feel like they are obligated to cheat or make up data,” Lee said. “How can I create a comfortable and inclusive environment so that this kind of stuff doesn’t happen?”

Daily News Contributor Michelle Liao contributed reporting.

Daily Staff News Reporter Eilene Koo can be reached at ekoo@umich.edu