Pennsylvania readers may be interested to learn that the founder of Theranos has been charged with massive fraud by the Securities and Exchange Commission. According to the SEC, the company raised $700 million over several years through fraudulent means. Theranos had stated that its portable product could determine a person’s health with the use of a few drops of blood. The company had also claimed that its device had been used in Afghanistan by the Department of Defense.
The prospect of such a product was enough to garner the company several investors and a $9 billion valuation. However, reports surfaced in 2015 that the company wouldn’t be able to deliver on its promises to investors. Although the company was able to secure a $100 million loan in December 2017, the future of the company remains in doubt.
Theranos was forced to fire a large number of employees and close facilities after the report came out. It’s CEO has agreed to give up 18.3 million shares in the business, which means that she no longer has voting control over the business she founded in 2003. Furthermore, she had agreed to pay a $500,000 fine and will not be able to run a public company for the next 10 years.
Those who are accused of corporate crime may need the help of a defense lawyer. An attorney could create a strategy for lowering legal penalties. For instance, it may be possible to assert that an individual never intended to defraud investors or others connected to the company. In some cases, an individual may have sold a product that he or she believed would make money but was ultimately not successful.