Theranos, a company that bills itself as a “consumer healthcare technology company,” is under hot water. Its chief executive officer, Elizabeth Holmes, has been considered guilty of committing serious financial fraud related to the sale of securities in Theranos’s businesses from 2013 to 2015.
While Theranos will be allowed to operate as a corporate entity in the United States of America, Holmes will not be allowed to serve as either an officer or director of a company that’s traded on public stock exchanges for the next ten years.
The Securities and Exchange Commission, a bureau under the United States government, is responsible for governing everything related to stocks, bonds, and other security exchanges that happen in the United States of America.
Theranos, per its own website, reported that “The Company [Theranos] and [Elizabeth Holmes] fully cooperated with the SEC throughout its investigation.”
Elizabeth Holmes will also be responsible for forking over a whopping $500,000 sum thanks to a substantial fine levied by the Securities and Exchange Commission, and also be required to involuntarily relinquish ownership of a whopping 18.9 million shares of stock shares in Theranos’s company.
Here’s What Really Happened
Don’t get it twisted – Elizabeth Holmes certainly committed financial wrongdoings at the helm of Theranos. The stakes were high for Holmes, and other companies that are successful today have likely committed fraud themselves, and never got caught – uncovering fraud and other financial crimes that corporations are involved in is considerably difficult – but she certainly knew that what behavior she was engaging in on behalf of Theranos was wrong.
The Securities and Exchange Commission filing details that Theranos raised in excess of $700 million from 2013 to 2015 by defrauding investors, claiming that the company had successfully devised a portable blood analysis tool that conducted swaths of legitimate tests on tiny samples of blood in short periods of time. However, this assertion was undeniably false.
To this very day, blood tests require full vials of blood to conduct laboratory tests on them, typically done for thousands of patients in the United States each and every day. Requiring less blood to carry out such tests would have been revolutionary, and undeniably cost-saving.
The Background Of Holmes And Theranos
Elizabeth Holmes attended the prestigious Stanford University, though she dropped out in 2003 to form Theranos. She was only 19 that year, when it was founded, in 2003.