Theranos: Scandal hit blood-testing firm to shut

Grant Boone
September 6, 2018

Mr Taylor said Theranos had run "out of time" to secure further investment or secure a buyer for its assets.

Prosecutors had said Holmes and Balwani used advertising and solicitations to encourage doctors and patients to use its blood testing laboratory services despite knowing the company could not produce accurate and reliable results consistently.

Holmes advertised the company as a cheaper and more efficient way for patients to test for life-threatening conditions, like cancer and diabetes, with just a few drops of blood from their fingers. The news was first reported by The Wall Street Journal, which published the letter.

Theranos founder Elizabeth Holmes was once lauded as the youngest self-made female billionaire.

Theranos founder Elizabeth Holmes settled a shareholder lawsuit in July that was created to recover whatever can be salvaged from the firm, the Journal said.

Holmes, who was once considered a wunderkind of Silicon Valley, and Balwani were charged with conspiracy to commit wire fraud and nine counts of wire fraud each.

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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".

The company told shareholders in an email that it will dissolve and pay out the remaining cash to creditors, according to the Journal.

The roster of Theranos investors-most of whom poured money into the company after its commercial rollout in Walgreens stores in late 2013-included the Waltons, heirs to Walmart Inc. founder Sam Walton; Atlanta's Cox family; the family of Secretary of Education Betsy DeVos; and Rupert Murdoch, executive chairman of 21st Century Fox and of News Corp, the Journal's parent company.

Investors bought what Holmes was selling and invested hundreds of millions of dollars in the company. Each invested $100 million or more in Theranos-investments that are now worthless. Starting in a basement located a few blocks away from campus, Holmes transformed her company to be worth over $1 billion in seven years time.

The Securities and Exchange Commission brought civil fraud charges against Holmes and Balwani in March.

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