Blood test company’s CEO accused of fraud, forced to pay $500K settlement
Elizabeth Holmes, a Stanford University dropout once likened to Steve Jobs, was forced to pay a $500,000 fine and give up her blood-testing company Theranos after securities regulators said she fraudulently raised more than $700 million from investors.
Holmes gained national attention in 2013 when she claimed Theranos had developed a medical technology that could run thousands of medical tests from a single finger-prick of blood, detecting a range of illnesses from diabetes to cancer. She said her machines could process 90 percent of tests performed on standard lab equipment, according to Bloomberg.
Investors hopped on board and continued pumping money into the company, which eventually had to retract or correct results of thousands of medical tests.
As part of the settlement announced March 14, Holmes will also surrender 19 million shares and isn’t allowed to be an officer or director of a public company for 10 years.
“The Theranos story is an important lesson for Silicon Valley,” Jina Choi, director of the San Francisco Regional Office for the U.S. Securities and Exchange Commission, told Bloomberg. “Innovators who seek to revolutionize and disrupt an industry must tell investors the truth about what their technology can do today, not just what they hope it might do someday.”
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Blood, Fraud and Money Led to Theranos CEO's Fall From Grace
Daniel joined TriMed’s Chicago editorial team in 2017 as a Cardiovascular Business writer. He previously worked as a writer for daily newspapers in North Dakota and Indiana.