MARKETING

Theranos & Its CEO Settle Stock Fraud Charges with SEC

  • CMS;
  • The Arizona Attorney General;
  • Walgreen’s;
  • Its own shareholders.

And now Theranos has a new legal adversary: the US Securities Exchange Commission which has charged Theranos and its founder and CEO, Elizabeth Holmes with securities fraud for allegedly making false claims about its prickless blood analyzing technology to raise over $700 million in investment capital.

The Settlement Deal
On March 14, we learned that the company and Holmes have settled with the SEC. Under the settlement, Holmes will pay a $500,000 penalty, disgorge the 18.9 million shares in Theranos stock allegedly acquired via the fraud, and give up her voting control over the company. Holmes has also been barred for serving as an officer or director of a publicly traded company for 10 years.

According to the SEC, the defendants knowingly made false claims including predicting that the analyzer would generate over $100 million in 2014 revenues. Actual revenues came in just $99.9 million short of those projections. The SEC also charged the defendants with claiming that the product was used on the battlefield in Afghanistan and in medevac helicopters, neither of which was true.

Not included in the settlement is Theranos’s former President Ramesh Balwani who will get the chance to prove his innocence in a US California District Court.

Close

EMAIL ADDRESS


PASSWORD
EMAIL ADDRESS

FIRST NAME

LAST NAME

TITLE

COMPANY

CITY / STATE

Try Premium Membership

(-00000g2)