Elizabeth Holmes Charged and Indicted with Fraud

Elizabeth Holmes, the CEO of Theranos

via Wikipedia

Elizabeth Holmes, the CEO of Theranos

Elizabeth Holmes, the owner and founder of Theranos, was indicted on June 15, 2018, for defrauding investors out of hundreds of millions of dollars and also deceiving hundreds of patients and doctors. Elizabeth Holmes is a nineteen-year-old Stanford University dropout. Her company, Theranos, is the alleged healthcare of the future and has claimed to be capable of getting over two hundred results on developing diseases through a single drop of blood. Many doctors have claimed that this is not possible, but Elizabeth Holmes kept her lab testing secret. This claim was later revealed to be false, and Elizabeth was later indicted.

Elizabeth Holmes’ criminal charges involved a board stacked with prominent political figures and investors and a defrauding of roughly 9 billion dollars. Ms. Holmes accomplished this scandal by promising to upend the health industry and giving customers control over their healthcare. In court, both Ms. Holmes and Mr. Balwani, the former president and chief operating officer of Theranos before Ms. Holmes, pleaded not guilty to the charges of wire fraud. Holmes’ indictment was filed by the United States attorney’s office in San Francisco, and this allegation arrived about three months later after the Securities and Exchange Commission settled civil fraud charges against Elizabeth Holmes. Theranos later announced that Ms. Holmes stepped down as chief executive; she will be replaced by David Taylor, the company’s general counsel.

Theranos was largely invested, according to federal prosecutors, due to the culture of Silicon Valley and the lure of exciting new ventures. “Investors large and small from around the world are attracted to Silicon Valley by its track record, its talent, and its promise,” prosecutors said. “They are also attracted by the fact that behind the innovation and entrepreneurship are rules of law that require honesty, fair play, and transparency.” Ms. Holmes and Mr. Balwani were accused of misleading both the public and their investors. In addition to this, the company promoted devices and tests that not only did not work but also gave false results, endangering the lives of many patients. Ms. Holmes has drafted a spellbinding sales pitch and relentlessly pursued anyone-including some of her employees-who doubted her blood-testing machine. “There is one cardinal rule in Silicon Valley that most people never realize,” said Paul Saffo, a longtime technology consultant, “and this is never ever breathing your own exhaust.”

The U.S. Securities and Exchange Commission (S.E.C.) announced that Theranos and Holmes had agreed to a settlement, with Ms. Holmes agreeing to pay a 500,000 dollar penalty. She and the company did not deny any charges or allegations, but Mr. Balwani will continue to fight the claims.