Elizabeth Holmes, the once high-flying founder of Theranos, has been charged with “massive” fraud, stripped of control of the company and cannot lead a public company for 10 years, the SEC said Wednesday.
The Securities and Exchange Commission accused Holmes and former President Ramesh “Sunny” Balwani of orchestrating a $700 million years-long fraud, and said they have agreed to resolve the charges against them.
Palo Alto-based Theranos, founded in 2003, reached a valuation of $9 billion before it became apparent after stories by the Wall Street Journal starting in 2015 that the company’s blood tests were not as effective as its executives had claimed. The promise touted by Holmes and others were that a pin prick’s worth of blood would be enough for multiple blood tests.
Get tech news in your inbox weekday mornings. Sign up for the free Good Morning Silicon Valley newsletter.
The Journal reported, among other things, that Theranos was using its own technology on just a small fraction of the blood tests it offered at Walgreens. Last year, Theranos settled with Walgreens — which at one point had 40 Theranos blood-testing centers — which had sued the Silicon Valley company over its $140 million investment in the partnership.
via SEC charges Theranos, founder Elizabeth Holmes with ‘massive’ fraud – The Mercury News
Daily Browse 