Theranos blood tests.

Theranos Investors Are Misled

In the latest attack on the California health technology company, Theranos investors, led by Silicon Valley financier Robert Coleman, have accused the company’s executives of violating securities laws by hiding information that its blood testing product had failed to perform as promised.

Colman and other investors accuse Theranos CEO Elizabeth Holmes and COO Ramesh Balwani of misleading the public and investors long after they knew they couldn’t deliver on their plans to run hundreds of tests on a single drop of blood.

They, along with other investors, claimed they were persuaded to invest after promises were made that the company’s technology would revolutionize the way blood tests are run. Theranos even reached a deal with Walgreens to perform blood tests in certain locations – a deal that has since been cancelled.

After media reports surfaced that the FDA did not approve the company’s specialized blood tubes, the company was forced to discontinue their use. Further sanctions came from the Centers for Medicare and Medicaid over allegedly shoddy lab practices, leading to a 2-year ban on lab ownership by Holmes, among other sanctions.

Several other proposed class actions are now pending against Theranos and Walgreens around the country, including a suit in Delaware by an investment fund seeking to rescind its stock purchase agreement based on Theranos’ allegedly fraudulent misrepresentations.

The company’s valuation has dropped from $9 billion in 2014 to around $800 million, a decrease of 90%.

Call a Los Angeles Securities Fraud Attorney Today

If you invested with Theranos, you may have certain legal rights that require your immediate attention.

Contact an experienced Los Angeles securities fraud attorney today for a consultation to discuss your rights and options.

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Theranos failed blood panel test.

Theranos Sued by Investment Fund

An investment fund filed suit against California-based blood-testing startup Theranos in Delaware Chancery Court Monday, seeking to rescind its stock purchase agreement and claiming damages as a result of Theranos’ allegedly fraudulent misrepresentations, omissions, and violations regarding the fund’s investment in the company.

The lawsuit, filed by Partner Investments LP, comes on the heels of Theranos’ announcement that it would shutter its clinical labs and in-store “wellness centers” following sanctions over its allegedly shoddy lab practices. Also named in the suit were Theranos founder Elizabeth Holmes and former president Ramesh Balwani.

The lawsuit is the latest in a string of issues the company is facing, including sanctions imposed by the Centers for Medicare and Medicaid Services over poor lab practices resulting in a two-year ban on lab ownership by Holmes, as well as several quality control issues at the California-based labs.

Theranos also pulled its request for FDA clearance for a Zika blood test after an inspection revealed the data collected by the company had been done without a patient-safety protocol in place.

Theranos made headlines for its proprietary blood-testing device, which claimed it could obtain the same tests from a few drops of blood, where other companies required multiple vials. Instead, an investigation by The Wall Street Journal raised serious doubts about its accuracy leading Theranos to void the results of several thousands of test results.

Several other proposed class actions are currently pending against Theranos and Walgreens, where many in-store “wellness centers” were located.

Call a Los Angeles Securities Attorney Today

If you suffered a loss after investing in Theranos, or if you visited one of their wellness centers, you may have certain legal rights that require your immediate attention.

Contact an experienced Los Angeles securities attorney today for a consultation to discuss your rights and options.

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