Theranos to formally dissolve

Theranos to formally dissolve

At its peak, the privately held company was valued at $9 billion. It will formally disband in the coming months, according to an email to shareholders obtained by The Wall Street Journal.

Wednesday's announcement comes almost three months after Theranos founder and former CEO Elizabeth Holmes and former Chief Operating Officer Ramesh Balwani were charged with criminal fraud.

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Elizabeth Holmes, the founder of the scandal-plagued company, was indicted by federal prosecutors in June for allegedly defrauding investors, doctors and the public in a multi-million dollar scheme.

The liquidation process could take from six to 12 months, Taylor said in the email. But that unraveled spectacularly under the scrutiny of Wall Street Journal investigative reporter John Carreyrou.

Theranos claimed to have invented a line of blood-testing machines that can run complicated tests using just a single finger prick of blood.

In March, Holmes reached a settlement with the Securities and Exchange Commission related to its fraud charges, which further damaged Theranos and helped lead to its demise.

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It took the better part of a decade for the fraud perpetrated by Theranos to be uncovered, in large part because Holmes was able to cultivate relationships with some of the world's most powerful, influential and wealthy people.

In April 2017, the Centers for Medicare and Medicaid Services (CMS) sanctioned Theranos and revoked its clinical laboratory testing certificate, which caused the pharmacy chain Walgreens to terminate its partnership with the start-up and sue Theranos for $140m. Holmes settled with the SEC, agreeing to pay $500,000 in fines and penalties.

Balwani continues to fight the SEC's charges against him.

Ultimately, blame must be laid at the cult of hero worship that sprung up around Elizabeth Holmes, much as it did around Steve Jobs, and more recently, Elon Musk.

Neither Taylor nor representatives for Palo Alto, California-based Theranos immediately responded to Reuters' requests for comment.

"The defendants also represented to investors that Theranos would generate over $100 million in revenues and break even in 2014 and that Theranos expected to generate approximately $1 billion in revenues in 2015 when, in truth, the defendants knew Theranos would generate only negligible or modest revenues in 2014 and 2015", the U.S. Attorney's Office said.

FOX Business' Brittany De Lea contributed to this article.


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