Theranos, touting fast and easy blood tests, was a billion-dollar Silicon Valley beast.
But it all came crashing down after its tech turned out to be unreliable and it emerged the company used traditional tests to hide that fact. Investors were bilked and its partners sued it, but founder Elizabeth Holmes seemed to escape serious sanction–until now. In a settlement with the SEC, she gets away with a $500,000 penalty, must leave Theranos, and is barred from serving as an executive on a public company for 10 years. (The SEC does not impose criminal penalties such as imprisonment.)
Theranos was one of the health-care world’s best funded and highest-profile startups, with a CEO who gained attention for her bold statements about the company’s blood tests. As those claims unraveled, the company went through a dramatic downfall marked by accusations of scientific fraud, lawsuits and sanctions by health regulators.
The company said it could run dozens of diagnostic tests using a single drop of blood, an advance that could have upended a medical diagnostics market worth billions of dollars. Doubts began to emerge about the technology after a Wall Street Journal report that the testing equipment might not be what it seemed.
“The company is pleased to be bringing this matter to a close and looks forward to advancing its technology,” Theranos said in a statement, adding that it cooperated with the SEC’s investigation.