Theranos CEO To Be Barred From Company, Pay $500K To Settle SEC’s ‘Massive Fraud’ Charges
Elizabeth Holmes did not admit or deny the allegations that she exaggerated or lied about her blood-testing technology while raising $700 million from investors.
The New York Times:
Elizabeth Holmes, Theranos C.E.O. And Silicon Valley Star, Accused Of Fraud
Holding up a few drops of blood, Elizabeth Holmes became a darling of Silicon Valley by promising that her company’s new device would give everyday Americans unlimited control over their health with a single finger prick. Ms. Holmes, a Stanford University dropout who founded her company, Theranos, at age 19, captivated investors and the public with her invention: a technology cheaply done at a local drugstore that could detect a range of illnesses, from diabetes to cancer. (Thomas and Abelson, 3/14)
Blood, Fraud And Money Led To Theranos CEO's Fall From Grace
The lawsuit and settlement announced Wednesday by the U.S. Securities and Exchange Commission detailed how [Elizabeth] Holmes and her chief deputy lied for years about their technology, snookered the media, and used the publicity to get investors to hand more than $700 million to keep the closely held company afloat. As part of the accord, Holmes will pay a $500,000 fine, surrender 19 million shares and is barred from being an officer or director of a public company for 10 years. (Robinson and Spalding, 3/14)
The Associated Press:
Holmes Surrenders Theranos, Pays $500K After 'Massive Fraud'
Elizabeth Holmes, a Stanford University dropout once billed as the "next Steve Jobs," has forfeited control of Theranos, the blood-testing startup she founded, and will pay $500,000 to settle charges that she oversaw a "massive fraud. "Under an agreement with the Securities and Exchange Commission, Holmes is barred from serving as an officer or director of a public company for 10 years. The SEC said Wednesday that it will pursue its case against the president of the company, Ramesh "Sunny" Balwani, in federal court. (Sweet, 3/14)
The Wall Street Journal:
SEC Charges Theranos CEO Elizabeth Holmes With Fraud
The SEC began investigating Theranos after The Wall Street Journal reported in October 2015 that the lab instrument developed as the linchpin of the company’s strategy handled just a small fraction of the tests sold to consumers. Some employees also were leery about the machine’s accuracy, the Journal reported. Theranos was valued at more than $9 billion at the time and Ms. Holmes’s majority stake at more than half that. (Carreyrou, 3/14)
The Washington Post:
SEC Accuses Theranos Of ‘Elaborate, Years-Long Fraud’
Over the years, Holmes, now 34, persuaded some of the most powerful men in Washington to serve on her company’s board — drafting former secretaries of state George Shultz and Henry Kissinger and Marine Gen. Jim Mattis as advisers. Their reputations lent credibility, connections and heft to a young company that promised to upend medicine by making blood tests cheap, fast and accessible. (Johnson, 3/14)
SEC Charges Theranos CEO With 'Massive Fraud'
"They deceived investors by, among other things, making false and misleading statements to the media, hosting misleading technology demonstrations, and overstating the extent of Theranos’ relationships with commercial partners and government entities, to whom they had also made misrepresentations," the SEC charged. (Weixel, 3/14)
SEC Charges Theranos And CEO Elizabeth Holmes With Fraud
The SEC’s complaint highlights in remarkable detail the lengths to which Theranos went to sell investors on a pitch that was too good to be true. For example, the company distributed binders to investors containing printouts of sunny articles from The Wall Street Journal, Wired, and Fortune quoting Holmes making statements about the company’s progress that would later prove false. Also in the binder: two reports about Theranos’s pharma collaborations emblazoned with the logos of top pharma companies — which were written not by those drug makers, but by Theranos staffers. (Robbins, 3/14)