Theranos Founder Settles Federal Fraud Charges
Silicon Valley-based blood testing company Theranos and its chief executive officer agreed to settle fraud charges with federal regulators Wednesday. A consumer lawsuit from Arizona’s attorney general was settled late last year.
The federal lawsuit and settlement strips CEO Elizabeth Holmes of majority control of the company, surrendering 19 million shares. Holmes will also pay a $500,000 fine, and is barred from being an officer or director of a public company for 10 years.
At its high point, Theranos was valued at $9 billion, primarily based on claims its technology could run accurate blood tests from a single drop of blood. Federal regulators say Holmes and Theranos’ former president, Ramesh Balwani made numerous false and misleading statements. In December, Theranos customers in Arizona were awarded $4.6 million in refunds in a consent judgment reached with the Attorney General’s Office.