Stanford University dropout Elizabeth Holmes was once anointed “the next Steve Jobs.”
In a Wednesday press release, the SEC announced a series of charges against Holmes, Theranos, and the company’s former President Ramesh Balwani, alleging they had been running a “years-long fraud in which they exaggerated or made false statements about the company’s technology, business, and financial performance.”
And no black turtleneck, no matter how stylish, can cover up the jaw dropping SEC claims.
“The complaints further charge that Theranos, Holmes, and Balwani claimed that Theranos’ products were deployed by the U.S. Department of Defense on the battlefield in Afghanistan and on medevac helicopters and that the company would generate more than $100 million in revenue in 2014,” reads the press release. “In truth, Theranos’ technology was never deployed by the U.S. Department of Defense and generated a little more than $100,000 in revenue from operations in 2014.”
Essentially, they were all full of shit.
Holmes’s fall from grace began way back in 2015 with a bombshell piece in The Wall Street Journal by reporter John Carreyrou. In it, Carreyrou reported that the company was likely overstating the abilities of its blood-testing technology — a report that was instantly derided by Holmes and her true believers.
Holmes specifically called out the story as misleading in a company meeting reported by Vanity Fair. Chants of “fuck you, Carreyrou” subsequently erupted in the Theranos cafeteria.
“This is what happens when you work to change things,” Holmes told CNBC immediately following the publication of The Wall Street Journal story. “First they think you’re crazy, then they fight you, then you change the world.”
Oh what a difference a few years makes.
“As a result of Holmes’ alleged fraudulent conduct,” explained Stephanie Avakian, Co-Director of the SEC’s Enforcement Division, in the press release, “she is being stripped of control of the company she founded, is returning millions of shares to Theranos, and is barred from serving as an officer or director of a public company for 10 years.”
Importantly, Holmes “neither admitted nor denied the allegations in the SEC’s complaint,” however she still agreed to pay a $500,000 penalty.
It seems the next Steve Jobs will have to wait a bit longer to change the world.