Published: Fri, September 07, 2018
Medical | By

Theranos, Blood-Testing Company Plagued By Scandal, Says It Will Dissolve

Theranos, Blood-Testing Company Plagued By Scandal, Says It Will Dissolve

The indictment by the USA attorney in San Francisco alleging wire fraud follows claims by the Securities and Exchange Commission that Theranos, Holmes and Balwani lied about the company's technology while raising more than $700 million to build the medical-testing startup. 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.

Things began to turn sour in 2015 when it...

The letter explains that the company "intends to enter into an assignment for the benefit of creditors". This would allow Theranos to distribute its remaining funds - approximately US$5 million (AU$7 million) - to its unsecured creditors. Over four months, investment bank Jefferies Group LLC reached out on Theranos's behalf to more than 80 potential buyers, and executed nondisclosure agreements with 17 of those parties, the email said, adding: "We assisted those parties with diligence and had numerous follow-on conversations".

Theranos claimed to have invented a line of blood-testing machines that can run complicated tests using just a single finger prick of blood. But that unraveled spectacularly under the scrutiny of Wall Street Journal investigative reporter John Carreyrou. As the former CEO Elizabeth Holmes is facing fraud charges, the company has been mired in a myriad of scandals.

The Wall Street Journal has obtained a copy of the email, which was sent by CEO David Taylor to shareholders.

The announcement comes six months after Theranos and its chief executive, Elizabeth Holmes, agreed to settle fraud charges with the US Securities and Exchange Commission in relation to false claims made about the company's technology, business and financial performance.

At its height Theranos was valued at almost US$10 billion ($15.1b) and Elizabeth Holmes was a darling of industry.

She carefully crafted her image as well, wearing nearly entirely black turtleneck sweaters that earned her the moniker in Silicon Valley as "the next Steve Jobs".

After years of damning headlines, federal investigations, lawsuits, fines, infighting and desperate attempts to save the furniture, Elizabeth Holmes' Theranos is officially dead and buried. The confirmation that the company would be closing down wouldn't have been a surprise to investors as Theranos has lost millions of dollars since its authenticity was questioned in 2015.

Theranos collected a distinguished board of advisers and investors including Rupert Murdoch, former secretary of state Henry Kissinger, Oracle founder Larry Ellison, former U.S. Sens.

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