Theranos closes down after 2 top officials have been charged guilty

Pearl Mccarthy
September 7, 2018

It accused them of orchestrating an "elaborate, years-long fraud in which they exaggerated or made false statements about the company's technology, business, and financial performance".

Mr Taylor said the firm had breached the terms of its loan agreement with investor Fortress Investment Group, meaning the firm was now entitled to sell or take ownership of Theranos' intellectual property and assets. By brokering of a deal with the investment firm, Theranos gets to consolidate its leftover money in a trust for creditors that might take between six to 12 months to process.

Scandal-ridden health startup Theranos announced Tuesday that it will formally dissolve, just weeks after its founder was hit with federal fraud charges, the Wall Street Journal reported.

Theranos founder Elizabeth Holmes and the company's former president Ramesh "Sunny" Balwani were indicted in June on charges that they engaged in schemes to defraud investors, doctors and patients.

Holmes founded the company in 2003 to develop technology that she claimed was able to conduct clinical tests on small amounts of blood.

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The turning point then came in October 2015, when investigative reporter John Carreyrou of The Wall Street Journal questioned the validity of Theranos' technology.

It was briefly one of the most celebrated companies in Silicon Valley - but Theranos, a company valued at $9bn (£7bn) at its peak, will soon be no more. The Journal reports that most of the company's remaining employees worked their last day on August 31, while Taylor and a few others have just a few more days on the payroll.

After the SEC charged her and the company with fraud earlier this year, Holmes was stripped of control and is barred from serving as an officer or director at any public company for the next decade. WSJ claimed that Theranos had been using traditional blood testing machines to report test results to different investors, and that its "Edison" device provided erroneous results.

Neither Taylor nor representatives for Palo Alto, California-based Theranos immediately responded to Reuters' requests for comment. Her bold talk and black turtlenecks drew comparisons to Steve Jobs. Behind the scenes, it performed the vast majority of the tests with commercial analyzers purchased from other companies. Its hope was to save people from painful, drawn out and invasive medical procedures, as well as promising to do it more economically, and with less susceptibility to human error. In July 2016, the Centers for Medicare and Medicaid Services (CMS) revoked Theranos' CLIA license and prohibited Holmes from owning and operating a laboratory for two years. Each invested $100 million or more in Theranos-investments that are now worthless.

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