The SEC charged Theranos Inc., CEO Elizabeth Holmes, and its former President Ramesh “Sunny” Balwani last week over fraudulent statements made to investors that racked in over $700 million and 18.9 million shares for the tech company since 2015.
Holmes and Balwani have not admitted nor denied allegations regarding their misleading statements on a new product, but have agreed to settle the fraud charges levied against them. Theranos Inc. gave false product demonstrations, exaggerated statements to investors, and created misleading media articles about a new portable blood analyzer they created.
The company promoted the technology as a laboratory tested product that could conduct comprehensive blood tests via finger prick, giving investors inaccurate information such as the military already putting the product to use in Afghanistan, with a promised generated revenue of $100 million.
In truth, the product had never been deployed and was projected to bring in a mere $100,000. Information given by Theranos regarding the technology has been wildly debunked by multiple sources, leading to lawsuits with involved companies such as Walgreens and Partner Fund Management.