SEC charges Theranos, founder Elizabeth Holmes with ‘massive’ fraud

Elizabeth Holmes, the once high-flying founder of Theranos, has been charged with “massive” fraud, stripped of control of the company and cannot lead a public company for 10 years, the SEC said Wednesday.

The Securities and Exchange Commission accused Holmes and former President Ramesh “Sunny” Balwani of orchestrating a $700 million years-long fraud, and said they have settled charges against them.

Palo Alto-based Theranos reached a valuation of $9 billion before it became apparent in 2016 that its pin-prick blood tests were not as effective as its executives had claimed.

Holmes, who in 2016 was banned from operating a blood-testing lab for two years, will pay a $500,000 fine, Theranos said Wednesday.

“The Company is pleased to be bringing this matter to a close and looks forward to advancing its technology,” a Theranos spokesperson said in an email.

This story is developing and will be updated.

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Source:: The Mercury News

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