The US Securities and Exchange Commission said Wednesday that Theranos and its founder, Elizabeth Holmes, had agreed to resolve the charges against them.
- Theranos, its CEO Elizabeth Holmes, and its former president Sunny Balwani have been charged by the SEC with fraud.
- The agency said Wednesday that Theranos and Holmes have agreed to resolve the charges against them.
- Theranos has been under fire since 2015, and had previously said it was working with the SEC regarding its investigation into the company.
Theranos, along with its CEO Elizabeth Holmes and former president Sunny Balwani have been charged by the SEC with "massive fraud."
The US Securities and Exchange Commission said Wednesday that Theranos and Holmes have agreed to resolve the charges against them. Holmes agreed to give up majority voting control over the company and reduce her equity in the privately-held company.
Balwani left the company in May 2016. The SEC's claims against him will be litigated in federal district court in California.
"As part of the settlement, neither the Company nor Ms. Holmes admitted or denied any wrongdoing," Theranos said in a statement.
The SEC alleged that :
- Theranos "made numerous false and misleading statements in investor presentations, product demonstrations, and media articles" about the company's blood-testing technology while raising more than $700 million.
- That included claims that Theranos technology was being used by the US Department of Defense in a deal that would result in more than $100 million in revenue in 2014. The SEC said that in reality, the deal accounted for $100,000 in revenue in 2014.
"Investors are entitled to nothing less than complete truth and candor from companies and their executives," SEC's Enforcement Division co-director Steven Peikin said in a release. "The charges against Theranos, Holmes, and Balwani make clear that there is no exemption from the anti-fraud provisions of the federal securities laws simply because a company is non-public, development-stage, or the subject of exuberant media attention."
As part of the resolution, Holmes has to pay a $500,000 fine and cannot be a director or officer of a publicly traded company for 10 years. She has to return 18.9 million shares of Theranos stock.
Here's Theranos's full statement:
"Theranos, Inc. announced today that the Company and its CEO, Elizabeth Holmes, have resolved a previously disclosed investigation by the U.S. Securities and Exchange Commission (SEC) into the offer and sale of Theranos securities from 2013 to 2015.
The Company and Ms. Holmes fully cooperated with the SEC throughout its investigation. As part of the settlement, the Company and Ms. Holmes agreed to comply with applicable federal securities laws. Ms. Holmes will pay a $500,000 fine and will not be eligible to serve as a director or officer of a publicly traded company for a period of 10 years. She will also return approximately 18.9 million shares of stock and relinquish her super-voting equity rights. As part of the settlement, neither the Company nor Ms. Holmes admitted or denied any wrongdoing.
Theranos’ independent directors said in a statement, 'The Company is pleased to be bringing this matter to a close and looks forward to advancing its technology.'"