Criminal Charges May Spell the End for Theranos
Four years ago, Theranos was a $10 billion company poised to turn a breakthrough blood testing technology into a diagnostics dynamo to the tune of $70 billion in annual sales. Today, the company and its founding CEO, Elizabeth Holmes, are on the brink of financial and legal ruin. The latest and most devastating blow came last month when a federal grand jury indicted Theranos CEO Elizabeth Holmes and former COO Sunny Balwani on nine counts of wire fraud and two counts of conspiracy, charges carrying a potential sentence of 20 years in prison, fines of $250,000 per count and restitution. According to prosecutors, “Holmes and Balwani used advertisements and solicitations to encourage and induce doctors and patients to use Theranos’ blood testing laboratory services,” all the while knowing that its touted fingerprick blood tests could not consistently produce accurate and reliable results. Meanwhile, The Wall Street Journal reports that Theranos is headed for bankruptcy. Four months ago, it appeared that Holmes and the company she founded in 2013 might be out of the woods when they settled stock fraud charges with the Securities and Exchange Commission. Now the prospects are far more grave.
Four years ago, Theranos was a $10 billion company poised to turn a breakthrough blood testing technology into a diagnostics dynamo to the tune of $70 billion in annual sales. Today, the company and its founding CEO, Elizabeth Holmes, are on the brink of financial and legal ruin.
The latest and most devastating blow came last month when a federal grand jury indicted Theranos CEO Elizabeth Holmes and former COO Sunny Balwani on nine counts of wire fraud and two counts of conspiracy, charges carrying a potential sentence of 20 years in prison, fines of $250,000 per count and restitution.
According to prosecutors, "Holmes and Balwani used advertisements and solicitations to encourage and induce doctors and patients to use Theranos' blood testing laboratory services," all the while knowing that its touted fingerprick blood tests could not consistently produce accurate and reliable results.
Meanwhile, The Wall Street Journal reports that Theranos is headed for bankruptcy.
Four months ago, it appeared that Holmes and the company she founded in 2013 might be out of the woods when they settled stock fraud charges with the Securities and Exchange Commission. Now the prospects are far more grave.
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