Briefing

Federal court reduces charges against Elizabeth Holmes in Theranos fraud case

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A judge ruled prosecutors can’t pursue charges based on claims that Holmes, the blood-testing company’s founder, and ex-president Sunny Balwani defrauded doctors or customers whose insurance companies—not they themselves—paid for the company’s faulty blood tests. Holmes and Balwani still face charges of defrauding investors who helped catapult the company to a US$9-billion valuation. (Bloomberg)

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Talking point: The ruling follows defence arguments that the case should be thrown out, and keeps it on track for an August trial date. The case deals with allegations that Holmes and Balwani sold patients blood tests knowing they didn’t work, and lied to investors, including Rupert Murdoch and the Waltons, to convince them to fund the biotech startup; investors reportedly lost more than US$600 million when the company unravelled. Theranos has captured the interest of the public, Hollywood and Silicon Valley, where it’s become a lesson in healthy skepticism of overzealous founders whose innovations seem too good to be true.