On Theranos: It ’s Time to Throw the Book at Healthcare Tech Frauds

By JASON CHUNG Huge news hit today as Theranos, its Chairman and CEO Elizabeth Holmes and its former President and COO Ramesh “Sunny” Balwani were charged with “elaborate, years-long fraud” by the Securities and Exchange Commission. The litany of supposed violations of the Securities Act of 1933 and the Securities Exchange Act of 1934 are almost as dizzying as the detailed factual allegations of repeated, willful fraud perpetuated by Holmes and Balwani on investors who likely should have known better. Reviewing the SEC complaint against Holmes, it’s stunning to see the extent to which Holmes and Balwani were able to pull the wool over investors’ eyes. The highlights of the SEC allegations include: In 2010, even knowing that Theranos’ miniLab product was not commercially ready, Holmes and Balwani pursued partnerships bringing the product to “Patient Service Centers” at a major pharmacy chain (Walgreens) and a national grocery chain (Safeway). Holmes directly told pharmacy executives that Theranos could conducts hundreds blood tests through a fingerstick in under an hour for a much lower cost than other competing project even though the technology had not been finalized. Holmes also told Walgreens that its analyzer was already deployed on military helicopters when no such relationship existed. In 2013, just prior to Theranos’ launch at Walgreens, Theranos realized its miniLab product would not be ready so it substituted an earlier production – one th...
Source: The Health Care Blog - Category: Consumer Health News Authors: Tags: Uncategorized Source Type: blogs