Theranos Founder Charged with Fraud. “deceiving investors by making it appear as if Theranos had successfully developed a commercially-ready portable blood analyzer” By Todd Horwitz, Bubba Trading

 

FRAUD AT THERANOS

Theranos Founder Charged with Fraud

Theranos founder Elizabeth Holmes was charged with “massive fraud” by the Securities and Exchange Commission on Wednesday, a downbeat coda to a once high-flying Silicon Valley start-up that promised to revolutionize the blood analysis process.

The SEC complaint charged that Theranos raised more than $700 million from late 2013 to 2015 while “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.

“But in reality, we allege that after years of development, Theranos was able to process just a small number of blood tests upon its proprietary analyzer, and instead conducted the vast majority of its patients’ tests on modified commercial analyzers that were manufactured by others,” Steven Peikin, the SEC’s co-director of enforcement, told reporters.

Ms. Holmes, 34 years old, and Theranos, which also settled the SEC’s charges, neither admitted nor denied wrongdoing. In a statement, the company said it and Ms. Holmes “fully cooperated with the SEC throughout its investigation.” Theranos’s independent directors said the Newark, Calif., company “is pleased to be bringing this matter to a close and looks forward to advancing its technology.”

The SEC began investigating Theranos after The Wall Street Journal reported in October 2015 that the lab instrument developed as the linchpin of the company’s strategy handled just a small fraction of the tests sold to consumers. Some employees also were leery about the machine’s accuracy, the Journal reported. Theranos was valued at more than $9 billion at the time and Ms. Holmes’s majority stake at more than half that.

Keep those stops tight
Todd “Bubba” Horwitz

IN ASSOCIATION WITH

Financial & Political Commentary

 

Tags

, , , ,

Related Posts

About the author

Todd Horwitz - Author of “Average Joe Options“. Todd began his trading career in 1980 at the CBOE. He was one of the original traders in the OEX & helped start the SPX. He is a member the CME where he trades S&P futures as well as foreign currencies & is a regular contributor to CNBC, Bloomberg, BNN, Fox & many other major news networks.