Theranos, the blood-testing company that captivated Silicon Valley and was founded by college dropout Elizabeth Holmes, is reportedly the subject of a federal probe. Holmes, the wunderkind who founded Theranos, quickly became the world’s youngest self-made billionaire after the company struck a deal with Walgreens three years ago. Her majority stake in Theranos makes her worth, by some estimates, more than $4.5 billion. According to The Wall Street Journal, Theranos is under a criminal investigation by the Justice Department and a regulatory investigation by the Securities and Exchange Commission over whether the company misled its investors over the state of its technology and operations. Theranos was created by Holmes when she was 19 as a way to make blood tests more efficient and less-invasive. The company’s technology purportedly could run numerous laboratory tests on a small drop of blood taken via a pin prick.
News of the probe is the latest blow Theranos has suffered. Federal authorities have been sniffing around the company for months, investigating claims by an employee that the company was manipulating data on how well its technology works. In January, Walgreens notified the company that it would terminate its partnership with Theranos if the company couldn’t correct the problems with its blood-testing technology. Federal health regulators have discussed banning Holmes, 32, from the blood-testing business for up to two years.
A spokesperson for Theranos issued a brief statement saying, “The company continues to work closely with regulators and is cooperating fully with all investigations.” During an appearance on NBC’s Today show on Monday, Holmes said she’s been “devastated” by the debacle swirling around Theranos — a saga that no doubt threatens her place among the world’s wealthiest people.
Read the full story at The Wall Street Journal.