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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PSP Investments Nears Deal on Azelis
PSP Investments and EQT Partners (through fund EQT VIII) are in exclusive talks to acquire Belgium-based Azelis S.A. from funds managed by Apax Partners. Formed in 2001, Azelis is a specialty chemicals and food ingredients distributor. The transaction is subject to regulatory approvals.
Oxford Properties Wins Rights on Barangaroo Office Development
Melbourne-based Grocon Pty Ltd selected Oxford Properties, the real estate unit of OMERS, as a preferred partner for it’s a A$ 2 billion, 5.2-hectare Barangaroo Central project development. This is an office tower development. Oxford Properties essentially won the rights toward the project (rumored at a price of A$ 100 million), freeing the developer from a high-cost finance deal with Maxcap, a lender.
Investment Management Corporation of Ontario Selects Jean Michel as CIO
The Investment Management Corporation of Ontario named Jean Michel as chief investment officer. This role is effective July 3, 2018. Michel was executive vice president, advisory services to depositors and strategic analysis, at Caisse de Depot et Placement du Quebec (CDPQ).
Wil Warren Named President of Lexington Partners
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Canada Pension Plan Investment Board (CPPIB) unveiled plans to commit 500 million BRL (C$ 175 million) in equity for a 20% interest in the newly established Goodman Brazil Logistics Partnership to invest in prime logistics and industrial assets in the key gateway cities of São Paulo and Rio de Janeiro. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]
Mubadala Investment Company is keen on growing exposure to agribusinesses whether in farming or aquaculture. With money from Mubadala and AMERRA Capital Management LLC, Andromeda Group acquired Nireus SA (at 74.34% stake) and Selonda SA at (79.62% stake), two European aquaculture companies that focus on sea bream and sea bass. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]
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