You are here: Home » Reuters » News
Business Standard

Theranos and its founder settle U.S. fraud charges - SEC

Reuters  |  WASHINGTON 

(Reuters) - Inc and its have agreed to settle "massive fraud" charges in a deal that strips her of majority control over the embattled blood-testing company, among other penalties, U.S. regulators said on Wednesday.

As part of the settlement, the said company founder must also return millions of shares to the privately held company and cannot serve as an or for 10 years.

was founded in 2003 aimed at developing an innovative with quicker results using one drop of blood. In 2015, however, its fortunes waned after reports suggested the devices were flawed and inaccurate.

The SEC's complaint alleged that the company, and Theranos' former president, Ramesh "Sunny" Balwani, "made numerous false and misleading statements in investor presentations, product demonstrations, and media articles" about its key product.

The SEC, describing the case as involving "massive fraud," said Theranos, and Balwani were charged "with raising more than $700 million from investors through an elaborate, years-long in which they exaggerated or made false statements about the company's technology, business, and financial performance."

Jina Choi, the of SEC's San Francisco Regional Office, said the company's troubles offered "an important lesson for Silicon Valley."

"Innovators who seek to revolutionise and disrupt an industry must tell investors the truth about what their can do today, not just what they hope it might do someday," she said in a statement.

(Reporting by and Tim Ahmann, Editing by and Dan Grebler)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Wed, March 14 2018. 22:52 IST