Healthcare Startup Theranos & Founder Elizabeth Holmes & Settle Charges with US Regulator for $700 Million Fraud
Healthcare startup Theranos founder Elizabeth Holmes have settled charges with United States (US) regulator, the Securities and Exchange Commission (SEC) for misleading investors about its healthcare technology. Elizabeth Holmes and Theranos had misled investors it had the technology to revolutionise blood testing and its products had been used by the US army in Afghanistan and to generate more than $100 million in 2014.
” Startup Theranos & Founder Elizabeth Holmes & Settle Charges with US Regulator for $700 Million Fraud “
Elizabeth went to Stanford University in 2001 and dropout in 2004. At only 19 years, she founded the startup in 2003 that promised to revolutionise blood testing and have since raised over $700 million from investors. Theranos had announced that its Edison device could test for conditions such as cancer and cholesterol with only a few drops of blood from a finger-prick, rather than taking vials from a vein.
Theranos’ technology was never used by the US Department of Defence and generated only more than $100,000 in revenue in 2014. Theranos’ proprietary analyser were built on modified and existing technology, and only a small number of tests were completed.
In the SEC settlement, she will lose control of Theranos and be fined $500,000. She will also return approximately 18.9 million shares of stock and relinquish her super-voting equity rights. As part of the settlement, neither the Company nor Ms. Holmes admitted or denied any wrongdoing.
The charges were brought against Theranos, Elizabeth Holmes and its former president, Ramesh Balwani for providing false and misleading statements in investor presentations, product demonstrations and interviews. In 2015, Elizabeth was estimated to be worth more than $4 billion.
Founded in 2003 by Elizabeth Holmes, Theranos, Inc. is a health technology company headquartered in Palo Alto, Calif. Its proprietary miniLab platform is designed to enable earlier disease detection and intervention by facilitating small-sample collection, testing and rapid communication of diagnostic information in distributed settings.
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