Online fundraisers have attracted interest as it appears that thousands of people may have been exposed to false claims about Theranos and Holmes
Who Is Elizabeth Holmes and What Is She Accused Of?
Theranos, the Silicon Valley tech firm whose billionaire founder, Elizabeth Holmes, promised to revolutionise blood tests, has been banned from testing blood for five years, after the company was found to have “overstated and falsified” information to investors, regulators and regulators.
The ban was handed down by the Theranos board of directors and administered by the FDA. It follows widespread problems at the company, including inaccurate tests, cancelled blood draws and fraudulent billing practices, which resulted in Theranos losing $731m (£540m) and management reshuffles.
In July, a review of Theranos’s blood testing technology found “disputed information related to the accuracy and reliability of clinical claims made in their reports”.
According to a report in the New York Times on Wednesday, Holmes could still face criminal charges because company executives allegedly did not inform regulators of data manipulation, device malfunctions and failures during clinical testing.
“What we want to ensure is that these were not in any way an attempt to interfere with or manipulate any investigation by any government agency,” deputy director of the Drug Enforcement Administration’s Los Angeles division, John Walters, told the NYT.
Investigations are being carried out by the FBI, US attorney’s office and Securities and Exchange Commission, although none have been reported.
Jennifer Warren, Holmes’s spokeswoman, said in a statement that Theranos intends to “vigorously defend against these charges, and seeks to have them dismissed in court as soon as possible”.
Warren denied allegations by court filings that Holmes repeatedly failed to report certain maintenance activities to a regulatory body, in violation of a federal order directing Theranos to comply with the requirements of the Centers for Medicare and Medicaid Services.
Holmes has reportedly said she intends to plead not guilty.
Through her biotechnology company, Holmes created a startup whose batteries could power everything from blood tests to smart glasses and automated surgery. The venture took a large chunk of the $1.3bn that Holmes, aged 26, raised from investors.
Holmes began Theranos with $375,000 borrowed from her parents and was raised in Stanford University’s elite Class of 2004. The then medical student pursued her dream of being a life-saving biomedical entrepreneur and charged into the medical technology arena with visions of radically revolutionary concepts like miniaturised infusion pumps – which took just a few moments to be inserted through tiny blood streams.
The company’s technology, which Holmes and fellow executives touted on US television shows, resulted in humiliating headlines for Theranos as dozens of professionals quit the company, citing “creepy” attitudes from Theranos’s management. Theranos also had to deny allegations that its flagship test, the Theranos Edge, was wrongly classified as cancer screening.
Some of Holmes’s closest friends from Stanford started an online fundraisers at fleamarket.org aimed at raising $35,000, raising more than $600,000 in five weeks. The campaign claims to show donors “allowing infighting and mismanagement to destroy a promising company” and “recognising that the dollar says, ‘I support the cause’”.
How does Holmes’s status as a billionaire play into the prospect of her legal and regulatory troubles? Legal experts have said such crowdfunding campaigns may benefit from Holmes’s wealth.
“Holmes becomes better known because of the negative press,” said Barbara McQuade, a law professor at the University of Michigan. “Whether that means she’s better-known, or I’m speaking theoretically here, I think the people who helped raise the money would quite likely say that she’s worth reading about.”
Holmes’s stature as a billionaire could also be a hurdle in the criminal case. “There’s no way she’d receive immunity on this,” said Miriam Krinsky, a criminal defence attorney in New York. “Her net worth would be a defense if she’s indicted.”
By Amelie Baron