Theranos Founder Charged With Massive Fraud by SEC
Elizabeth Holmes, founder and chief executive of scandal-ridden blood-testing startup Theranos, Inc., has been formally charged with fraud by the U.S. Securities and Exchange Commission (SEC) alongside the company’s former president, Ramesh “Sunny” Balwani, for their role in fleecing investors of more than US$ 700 million using grossly exaggerated claims about the efficacy and business potential of their core product. Theranos and Holmes have agreed to settle the charges levied against them in court, with Holmes agreeing to pay US$ 500,000 in penalties, according to an announcement from the commission.
As part of the settlement, Holmes has forfeited her shares and voting control of Theranos and been barred from serving as an officer or director of a public company for the next 10 years. No such agreement was made with Balwani, who will face the SEC’s lawyers in federal district court in the Northern District Court of California. The charges come nearly two years after the SEC first began its investigation into Theranos, following an explosive report published by The Wall Street Journal in October 2015 quoting former employees that claimed the company’s revolutionary blood-testing equipment was built on a sham.
Big Dreams
A Stanford dropout whose penchant for black turtlenecks and promising technological marvels once drew comparisons to Silicon Valley deity Steve Jobs, Holmes captivated investors in 2003 with her pitch to develop a portable blood analyzer that could run a comprehensive suite of tests using only a few drops of blood, and at a fraction of the cost of devices currently on the market. In truth, however, Theranos’ mythical proprietary technology – dubbed the Edison machine after the prolific inventor – turned out to be capable of only a small fraction of what was promised, with the vast majority of tests being ran on traditional machines manufactured by companies like Siemens.
Attracting Big Names
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The Libyan Investment Authority (LIA) has reportedly filed a lawsuit against JPMorgan in London, according to a spokeswoman for the country’s sovereign wealth fund. Like Libya itself, there are a number of competing factions within the LIA claiming to be the rightful custodians of the some US$ 60 billion that once resided within the fund’s accounts worldwide. With their ownership unclear, many of these accounts remain frozen under sanctions imposed by the United Nations since 2011, resulting in a number of legal battles taken up by Libyan authorities seeking to recoup and take control of the fund’s scattered assets.
The sovereign wealth fund still has its overseas assets frozen relevant to United Nations Security Council resolutions. However, the Libyan Foreign Investment Company, operating under the acronym
LAFICO, is a large sovereign wealth enterprise under LIA. It continues to run out of Tripoli Tower.
London Case
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Saudi Arabia will be opening the country’s first public movie theatre in more than a generation on April 18, 2018 in collaboration with AMC Entertainment, according to an announcement from the Saudi Ministry of Culture and Information. Located in Riyadh’s King Abdullah Financial District (KAFD), the cinema complex’s debut marks the signing of a definitive agreement between the U.S.-based cinema operator and the Public Investment Fund’s (PIF) newly-incorporated Development and Investment Entertainment Company (DIEC). Marvel’s “Black Panther” will be the first movie shown publicly.
Saudi Arabia lifted a 35-year ban on public cinemas last December as part of the kingdom’s grand Vision 2030 initiative to diversify its economy away from hydrocarbon revenues and expand growth of a nascent entertainment industry, opening the doors for investment partnerships with foreign entertainment companies. In tandem with the lifting of the ban, the PIF signed a non-binding Memorandum of Understanding (MoU) with AMC – the largest cinema operator by screens in the U.S., Europe and the world – to explore a wide range of commercial opportunities.
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Asset manager giant BlackRock Inc. signed a definitive agreement to acquire Tennenbaum Capital Partners, LLC, in a bid to strengthen its credit platform. BlackRock wants to build a larger private credit business to expand fee generation and offer clients more than just passive products. Formed in 1999, Los Angeles-based Tennenbaum Capital Partners is a firm that focuses on middle market performing credit and special situation credit opportunities. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]
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