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SEC Charges Theranos, CEO Elizabeth Holmes With 'Massive Fraud' (engadget.com)
An anonymous reader quotes a report from Engadget: The SEC has charged Theranos, Elizabeth Holmes and Ramesh "Sunny" Balwani with fraud relating to the startup's fundraising activities. The company, as well as CEO Holmes and former president Balwani are said to have raised more than $700 million from investors through "an elaborate, years-long fraud." This involved making "false statements about the company's technology, business and financial performance." In a statement, the commission said that the company, and its two executives, misled investors about the capability of its blood testing technology. Theranos' big selling point was that its hardware could scan for a number of diseases with just a small drop of blood. Unfortunately, the company was never able to demonstrate that its system worked as well as its creators claimed.
The company and Elizabeth Holmes have already agreed to settle the charges leveled against them by the SEC. Holmes will have to pay a $500,000 fine and return 18.9 million shares in Theranos that she owned, as well as downgrading her super-majority equity into common stock. The CEO is now barred from serving as the officer or director of a public company for 10 years. In addition, if Theranos is liquidated or acquired, Holmes cannot profit from her remaining shareholding unless $750 million is handed back to defrauded investors. Balwani, on the other hand, is facing a federal court case in the Northern District of California where the SEC will litigate its claims against him. Worth noting: the court still has to approve the deals between Holmes and Theranos, and neither party has admitted any wrongdoing.
The company and Elizabeth Holmes have already agreed to settle the charges leveled against them by the SEC. Holmes will have to pay a $500,000 fine and return 18.9 million shares in Theranos that she owned, as well as downgrading her super-majority equity into common stock. The CEO is now barred from serving as the officer or director of a public company for 10 years. In addition, if Theranos is liquidated or acquired, Holmes cannot profit from her remaining shareholding unless $750 million is handed back to defrauded investors. Balwani, on the other hand, is facing a federal court case in the Northern District of California where the SEC will litigate its claims against him. Worth noting: the court still has to approve the deals between Holmes and Theranos, and neither party has admitted any wrongdoing.
Well, did she get thrown to the ground, brutally arrested and earn a long prison sentence like a three time shoplifter caught stealing $50 dollars worth of stuff. Oh I see, one rule for the poor and another rule for the rich, cheat $700 million earn a multimillion dollar wage and pay a minor fine, compared to earned income and the losses. Oh the suffering of having to give up millions of worthless shares, apparently plenty of money left to pay well connected lawyers (it's those connections that create purposeful corrupt bias in the legal system).
Chaos - everything, everywhere, everywhen