Theranos, the health technology company seeking to revolutionize the way blood is drawn, and its founder and CEO Elizabeth Holmes are facing "massive fraud" charges for lying to investors according to a filing with the U.S. Securities and Exchange Commission.
According to the SEC filing, Theranos was charged with "deceiving investors by making it appear as if Theranos had successfully developed a commercially-ready portable blood analyzer that could perform a full range of laboratory tests from a small sample of blood."
Theranos, which was founded in 2003, promised an innovative blood testing device that would offer quicker results with just a single drop of blood, and it raised more than $700 million between 2013 and 2015. However, a 2015 Wall Street Journal report revealed the devices were flawed and inaccurate. At times, Theranos' proprietary analyzer could only do about 12 tests of the more than 200 tests it advertised, according to the SEC.
The SEC's complaint alleged Ms. Holmes and the company's former president, Ramesh "Sunny" Balwani, "made numerous false and misleading statements in investor presentations, product demonstrations, and media articles" about its key product.
Ms. Holmes agreed to pay a civil fine of $500,000 and can no longer serve as an officer or director of any publicly-listed company for 10 years. She must also return all of the shares she obtained. The SEC filed a separate action against Mr. Balwani.
More articles on health IT:
Epic's population health tool adds resources from Geisinger spinoff xG Health Solutions
Primary care physicians spend more time on EHR than face-to-face care, study suggests
DirectTrust Founding CEO Dr. David Kibbe to step down at end of 2018: 5 things to know