Under an agreement with the Securities and Exchange Commission, Theranos Inc. founder Elizabeth Holmes has agreed to pay a $500,000 fine to settle charges of fraud, U.S. regulators announced Wednesday.
Theranos, which once had a $9 billion valuation, claimed that it could change the way blood was analyzed in a laboratory. In its complaint, the SEC alleged that Holmes and former Theranos president Ramesh "Sunny" Balwani made "numerous false and misleading statements in investor presentations, product demonstrations, and media articles" about its devices, and raised "more than $700 million 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."
In addition to paying a fine, Holmes must return millions of shares to the company and cannot serve as an officer or director of a public company for 10 years. Steven Peiken, the SEC's co-director of enforcement, told reporters Wednesday that Balwani did not agree to a settlement, and the SEC intends to pursue litigation against him. He also said he hopes this case deters other executives from committing similar fraud.
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