- Theranos, along with its CEO Elizabeth Holmes and former president Sunny Balwani have been charged by the SEC with “massive fraud.”
- The agency said Wednesday that Theranos and Holmes have agreed to resolve the charges against them.
- The SEC alleged that Theranos had overstated its program with the US Department of Defence as well as the revenues it generated in 2014.
Theranos, its CEO Elizabeth Holmes, and a former executive have been charged with fraud by the SEC.
Theranos and Holmes have resolved the charges with the SEC in an agreement that involves Holmes giving up a lot of control over the blood-testing company.
The SEC alleged that Theranos “made numerous false and misleading statements in investor presentations, product demonstrations, and media articles” about the company’s blood-testing technology while raising more than $US700 million. Those discrepancies first came to light back in October 2015 when The Wall Street Journal published an investigation that questioned the accuracy of its blood test.
The SEC alleged that the company overstated the extent of its program with the Department of Defence. Through the program, the intent was to deploy Theranos’ blood-testing technology in Afghanistan and on medical helicopters. In reality, the SEC found that the DOD didn’t deploy Theranos’s technology.
Theranos also said the company would generate $US100 million in revenue in 2014. That year, the company made about $US100,000 in revenue.
Theranos and Holmes have agreed to resolve the charges against them. As part of the resolution, Holmes agreed to give up majority voting control over the company and reduce her equity in the privately-held company.