Elizabeth Holmes, the billionaire founder of Theranos, is facing a raft of lawsuits accusing her of bilking patients and investors out of billions of dollars.
On 12 March 2019, Holmes was acquitted of illegal sales of medical devices, but was found guilty on fraud and acquitted of theft. She faces a trial on securities and mail fraud charges, which the press has nicknamed “The Confidence Scam”. A decision is expected in June.
The company, known for its revolutionary blood-testing technology, was ultimately thought to have been a fraud; in short, the system it created didn’t work. Theranos has been mired in fraud and drug scandals for years.
Name: Elizabeth Holmes
Hometown: Palo Alto, California
Net worth: $4.5bn
Age in 2013 when she founded Theranos
2004: Diagnosed with Ehlers-Danlos syndrome, a life-threatening connective tissue disorder. Doctors told her that she was unlikely to live past her teens, but she would likely live well into her 40s. When she was 12, Holmes was diagnosed with necrotizing fasciitis, a rare flesh-eating bacteria that affected her abdominal muscles and breasts. If left untreated, it can kill.
She became a volunteer at the Children’s Organ Transplant Association, volunteering and working in the hospital’s organ retrieval and transplant department.
2007: Holmes becomes a board member for Theranos Inc.
2016: In September, the New York Times finds another FDA investigation into Theranos’ blood testing and reports an independent lab says its device detected and replicated all 21 conditions that the FDA suspected had been undetected by the company’s machines. Holmes, unaware of the conclusion, continues to claim the tests “work every time”.
2017: China’s state council warns Theranos that its blood-testing system can’t be used for diagnosis in the country.
2018: In June, Theranos makes a public presentation to try to reassure investors. Doctors’ group Jhpiego says a Theranos clinic had to explain why results could not be returned and the company’s team would have “failed” to protect patients.
2018: The Theranos name (Liza) is erased from textbooks listed at Elon University in North Carolina. In July, Theranos announced it would close its labs. In October, the SEC says it filed whistleblower reports over the fraud. And, in December, it claims Holmes and Theranos engaged in securities fraud.
What has Holmes said in response?
“The optics are terrible.” Holmes has said everything she has done has been for the good of society and for scientific advancement.
2018: She denies accusations of fraud. The claims in the claim (and in the 25 exhibits), she says, have no merit. “The SEC’s filing is a complaint, not a lawsuit, and she will plead not guilty and fully intend to defend against the claims.”
What can we expect from the SEC case against her?
In a statement, Tye McDonald, a lawyer for Theranos, said, “The SEC’s case against Theranos is filled with mischaracterizations, inaccuracies, and factual errors.”