Do you remember the Silicon Valley startup that was going to “disrupt” the blood testing industry? What about it’s darling CEO who was so much smarter than the rest of the medical industry? Remember the $9 billion valuation. Well, the joke is on the greedy venture capital dumbasses.
The Securities and Exchange Commission on Wednesday charged Theranos Inc., its founder and CEO Elizabeth Holmes, and former President Ramesh “Sunny” Balwani with “massive fraud” after a lengthy investigation. The SEC alleges that they raised $700 million in investments by orchestrating an “elaborate, years-long fraud in which they exaggerated or made false statements about the company’s technology, business, and financial performance.”
Without admitting or denying wrongdoing, Theranos and Holmes have agreed to settle the charges. As part of the settlement, Holmes will pay a $500,000 penalty, be barred from serving as a director or officer of a public company for 10 years, return her remaining 18.9 million shares obtained during the alleged fraud, and relinquish her voting control of Theranos. If Theranos is sold or liquidated, Holmes will not profit until more than $750 million is returned to allegedly defrauded investors and other shareholders.
Now, if a normal person does less than this, a 20 year prison sentence would not be out of the question. But if you are young, attractive and capable of duping self-absorbed venture capitalists, just say sorry and pay as much as you can and you’ll be ok.