Elizabeth Holmes — the Silicon Valley wunderkind whose blood-testing startup Theranos has collapsed in a slew of scandals — has been charged with “massive fraud” by the Securities and Exchange Commission.
The SEC on Wednesday accused Theranos CEO Holmes and a top lieutenant of defrauding investors of more than $700 million through false claims about its blood-testing technology.
Theranos and 34-year-old Holmes ran “an elaborate, years-long fraud in which they exaggerated or made false statements about the company’s technology, business, and financial performance,” according to the SEC.
While Theranos had said it was on track to make $100 million by the end of 2014, the real figure was “a little more than $100,000,” according to the SEC. And, contrary to what Theranos told investors about the Department Defense using its blood tests, they were “never deployed by the DOD in the battlefield, in Afghanistan, or on medevac helicopters,” according to the settlement.
Holmes — a Steve Jobs wannabe who dressed exclusively in black turtlenecks — settled with the regulators for $500,000 while neither admitting nor denying the accusations. So crime does pay as she probably made much more than that.
She additionally agreed to not be a director or officer of a public company for 10 years, and to forgo profiting from Theranos ownership until $750 million is returned to investors, according to the consent order with the SEC.
Ramesh “Sunny” Balwani, the company’s president and chief operating officer, is fighting the charges.