CNBC reports that Elizabeth Holmes, the founder of Theranos, a blood testing company, has been charged with fraud, according to the Securities and Exchange Commission. Theranos has released a statement saying Holmes has agreed to pay a $500,000 fine and will be barred from serving as an officer or director of any publicly-owned company for the next 10 years.
Holmes was the acting CEO of Theranos when the company allegedly raised over $700 million between 2013 and 2015, all while making it appear to investors that the company had developed a transportable blood testing machine capable of performing an array of tests from a small sample.
While raising these funds, the SEC alleges the company conducted misleading demonstrations and overstated its relationships with partners. In reality, the company could only perform about 12 of the 200 tests it advertised. Holmes, along with former president Ramesh “Sunny” Balwani, also allegedly lied about the level of their involvement with the military.
The Wall Street Journal has conducted investigations into the technology used by Theranos over the last five years, leading to legal proceedings between the company and the Centers for Medicare & Medicaid Services and the Arizona attorney general’s office.
Another lawsuit has been settled between Theranos and Partner Fund Management, a company that invested more than $96 million with them in 2014.
The SEC has stated that Holmes will not profit from any sale or liquidation of Theranos until over $750 million is also returned to investors.
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