We have written before about the sordid tale of Theranos and its promise to revolutionize the blood testing industry. Under the leadership of founder Elizabeth Holmes and former president Ramesh Balwani, the company promised that it could perform a wide-range of blood tests from just a finger prick, rather than the full vial of blood most current tests require. This promise caught the eyes of investors, who poured millions of dollars into the company and turned it into one of America’s most talked-about startups.
As it turned out, though, Theranos’ new blood test was unreliable—at best—and the company’s bold claims to investors and the general public were riddled with false and unsupported statements.
The house of cards came tumbling down when former employees blew the whistle on the company’s practices to both regulators and a Wall Street Journal reporter. That reporter, John Carreyrou, went on to write the highly acclaimed book, Bad Blood, which details not only how this massive fraud was perpetuated, but also the story of the key whistleblowers whose brave actions brought about the end of this criminal enterprise. SEC actions were later filed against Holmes and Balwani, and Holmes eventually reached a settlement that required her to pay a sizeable fine and step down as CEO of the company. In June of 2018, both Holmes and Balwani were federally indicted on charges that they engaged in schemes to defraud investors, doctors, and patients.
With all of this mounting pressure, it is no surprise that Theranos now appears to be getting ready to dissolve. The current CEO/ general counsel, David Taylor, has stated that the company had been looking to sell Theranos’ remaining assets but found no interested buyers. Having now run out of time, the company has indicated that it is planning to dissolve in the near future and turn its few remaining assets over to one of its creditors.
In the long term, building a company on deceit and false statements is never a viable business model. If nothing else, the rise and fall of Theranos will hopefully serve as a cautionary tale to other companies looking to play fast and loose with the truth.
To learn more about our Whistleblower & Qui Tam practice click here. Our firm is located in Nashville, Tennessee but we represent whistleblowers all around the country.
Contact us today for a free consultation. We are here to work for you!