Post by icemandios on May 3, 2017 14:38:26 GMT
Theranos settles with San Francisco hedge fund
by Amirah Al Idrus | May 2, 2017 5:31pm
Theranos
The settlements with Partner Fund Management are just the latest; last month, Theranos settled with the Arizona Attorney General to fork over $4.65 million to Arizona residents who had paid for Theranos blood tests.
Theranos settled two lawsuits with Partner Fund Management, which backed the embattled blood-testing startup with a $96.1 million investment in 2014.
San Francisco-based Partner Fund Management sued Theranos for securities fraud in October. The suit, filed in Delaware Chancery Court, claimed that Theranos engaged in securities fraud, negligent misrepresentations and violations of the Delaware deceptive trade practices act, The Wall Street Journal reported. At the time, Theranos called the suit “without merit” and its assertions “baseless.”
“Theranos is pleased to have resolved both lawsuits with PFM," said Theranos General Counsel David Taylor in the statement. "Although we are confident that we would have prevailed at trial, resolution of these two cases allows our tender offer to go forward and enables us to return our focus where it belongs, which is on executing our business plans and delivering value for our shareholders.” Theranos kept mum on the terms.
The settlements come a month after the revelation that Theranos offered investors shares from CEO Elizabeth Holmes’ personal stake if they vowed not to sue the company. The deal covers investors who participated in Theranos’ latest financing rounds, which does not include PFM.
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Theranos has been settling disputes left and right—in April, the company put an end to two legal battles in two days. It settled with the Arizona Attorney General to fork over $4.65 million to residents who had paid for Theranos blood tests between 2013 and 2016.
The company also promised the Centers for Medicare & Medicaid Services that it would not run a lab for two years. In exchange, the agency will reduce penalties from a set of sanctions it handed down last year. Now, CMS will not pull the company’s CLIA certificates and has reduced the monetary penalty it imposed—$10,000 per day of noncompliance—to $30,000.
Once valued at $9 billion, Theranos came to prominence due to its fingerprick blood-testing technology that it claimed could perform lab tests on just a few drops of blood. The company has been on a downward spiral since October 2015, when reports exposed accuracy issues with its tech.
The company went into serious damage-control mode before ultimately abandoning its fingerprick tests in favor of a tabletop blood sample processor.
“The Company now brings to a close the burden and expense of litigation and preserves resources to bring the miniLab platform to market,” Theranos said in the statement.