Theranos, CEO Holmes, and Former President Balwani Charged With Massive Fraud

Southpaw

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Press Release


Theranos, CEO Holmes, and Former President Balwani Charged With Massive Fraud
Holmes Stripped of Control of Company for Defrauding Investors
FOR IMMEDIATE RELEASE
2018-41

Washington D.C., March 14, 2018 —

The Securities and Exchange Commission today charged Silicon Valley-based private company Theranos Inc., its founder and CEO Elizabeth Holmes, and its former President Ramesh “Sunny” Balwani with raising more than $700 million from investors through an elaborate, years-long fraud in which they exaggerated or made false statements about the company’s technology, business, and financial performance. Theranos and Holmes have agreed to resolve the charges against them. Importantly, in addition to a penalty, Holmes has agreed to give up majority voting control over the company, as well as to a reduction of her equity which, combined with shares she previously returned, materially reduces her equity stake.

The complaints allege that Theranos, Holmes, and Balwani made numerous false and misleading statements in investor presentations, product demonstrations, and media articles by which they deceived investors into believing that its key product – a portable blood analyzer – could conduct comprehensive blood tests from finger drops of blood, revolutionizing the blood testing industry. In truth, according to the SEC’s complaint, Theranos’ proprietary analyzer could complete only a small number of tests, and the company conducted the vast majority of patient tests on modified and industry-standard commercial analyzers manufactured by others.

The complaints further charge that Theranos, Holmes, and Balwani claimed that Theranos’ products were deployed by the U.S. Department of Defense on the battlefield in Afghanistan and on medevac helicopters and that the company would generate more than $100 million in revenue in 2014. In truth, Theranos’ technology was never deployed by the U.S. Department of Defense and generated a little more than $100,000 in revenue from operations in 2014....



https://www.sec.gov/news/press-release/2018-41
https://www.sec.gov/news/press-release/2018-41
 

Kel Varnsen

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One of Governor Ducey’s worst mistakes.
 

Dback Jon

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Scottsdale Mayor Jim Lane was all in on them too - they employed a lot of people at SkySong
 

Russ Smith

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The real life ending to the Hulu show "The Dropout", highly recommend.

The level of corruption in this mess is infuriating.

Yeah and she isn't stopping. I'm convinced she got pregnant because she believed she would get a lighter sentence. She's trying to blame everyone else and making all sorts of claims.

Mark Geragos the attorney(Scott Peterson trial among many) said he's surprised that the jury convicted her as "strongly" as they did. He said if he were defending her his entire case would have been at no time during any of this did she do the expected thing and cash out all her stock. If she knew this whole thing was a fraud why did she not cash out, why hold knowing it would eventually get exposed? So his defense was even if was false, she didn't know it she thought the product worked. Which if you've read the book or seen the movie or seen testimony is so untrue. She knew, she was the one pushing forward knowing it didn't work. Put lots of lives at risk.
 

AsUpRoDiGy

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Nice to see a white collar crime being punished accordingly. SBF better be looking over his shoulder after this one.
 

Dback Jon

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She only went to jail because a she’s a woman be she defrauded wealthy people.

***P+R Comment Removed**

I’m glad she’s in jail or going to jail but the fact that Rick Scott walks free among us shows our justice system is still very corrupt
 
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