Beacon Transcript – Theranos and Holmes, its CEO and founder, are facing yet another new lawsuit as two more of the company’s investors have decided to take action against them.
Theranos is a Palo Alto, California-based privately owned company which was specialized on health technologies such as its renowned microfluidics and fingerstick technologies.
Following investigations, the company received a number of sanctions from the Centers for Medicare and Medicaid Services.
These included both a revocation of the Theranos CLIA certificate and a revocation of its owners’ and operators’ rights of working in a laboratory over a period of two years.
The cause of all these investigations and ensuing sanctions and now lawsuits is related to the company’s blood testing practices.
Theranos declared that its technology could analyze and produce tests by using just a single drop of blood. But its results were put to question when reports appeared that the technology used was the usual lab equipment.
As the Walgreens’ outlet testing was revealed to have been made by the usual technology, these tests required a higher blood quantity.
As such Theranos’s integrity and practices started being investigated and its ties with Walgreens were severed by the latter company.
With the company facing serious repercussions for its practices, the company’s Partner Fund Management or PFM also decided to take action.
Back in October, the PFM decided to sue Theranos and Elizabeth Holmes. They targeted the aforementioned Holmes, the founder and CEO of the company, as well as its former president, Ramesh Balwani.
The two were accused of deceiving the investors with false information. They were also accused of making false statements and promises which were built on omissions and deceitful declarations.
One such declaration stated that the company had invented and perfected a revolutionary technique which would mark a global change in lab practices.
As the PFM sued Theranos, just a few weeks later Walgreens, the drugstore chain, decided to seek a case against the company for a $140 million sum.
Now, a third case has been filed against Theranos and Holmes, which was filed by two of the company’s investors.
However, this new case is also the first among them to also seek a class-action status and has similar plaintiffs with the PFM case.
The two investors to have filled the lawsuit are Robert Colman and Hillary Taubman-Dye.
Robert Colman, who is a Silicon Valley investment banker and well-known in his area, started investing in the company after its 2013 Walgreens association.
In contrast, Hillary Taubman-Dye could be considered to have made an unfortunate choice. She declared to have bought company shares just a few months before the scandal broke down in August 2015.
Reportedly, Taubman-Dye tried canceling the transaction made through the SharesPost Inc. online exchange platform but did not succeed.
As of December, her transaction went through and she has now joined the class-action lawsuit.
The lawsuit will be undertaken by the law firm Hagens Berman Sobol Shapiro. According to declarations, the firm is looking for other investors interested and willing to join the case.
It is also reportedly looking for various sources of information which can offer details and help them in their investigation for the case against Theranos and Homes.
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