02 MAY

Theranos settles “series of lies” lawsuits from investor that chipped in $96M

On Monday, Theranos announced the settlement of two lawsuits that were in response to an alleged “series of lies.” Both suits had been brought by Partner Fund Management LP, a hedge fund that invested $ 96.1 million in the blood-testing company.

In the suits, both filed in the Delaware Court of Chancery, PFM claimed that Theranos mislead investors about the abilities of its blood-testing technology, the Wall Street Journal reports. One suit sought to recoup PFM’s entire investment, plus damages. The other sought to prevent Theranos from making deals with late-stage investors. Those deals, which can now proceed, will provide additional stock to investors who agree not to sue Theranos.

For its cases, PFM collected depositions from Theranos employees and board members, which were unsealed and reported by the Wall Street Journal last month. The depositions revealed allegations that Theranos used a shell company to buy commercially available blood-testing equipment to run tests instead of relying on its own equipment. The depositions also included allegations that Theranos faked blood-test demonstrations to win over potential investors.

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Ars Technica

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