Theranos founder Elizabeth Holmes, who promised to revolutionize blood testing, has been charged by the SEC with a “massive fraud” involving more than $700 million.
Former president Ramesh “Sunny” Balwani was also charged. The two raised money from investors “through an elaborate, years-long fraud in which they exaggerated or made false statements about the company’s technology, business, and financial performance,” the SEC said Wednesday.
Theranos and Holmes agreed to resolve the claims agains them, the SEC said. Holmes will give up control of the company and much of her stake in it. The SEC said it would take its case against Balwani to federal court in San Francisco.
Theranos is a Silicon Valley startup once deemed to be worth as much as $9 billion. It formed in 2003 to create a cheaper, more efficient alternatives to traditional medical tests.
But it’s been rattled by controversy following a 2015 Wall Street Journal report that questioned its technology and testing methods. The company has since voided two years of blood tests, faced federal probes and pivoted away from blood testing.