Theranos founder Elizabeth Holmes and the blood-testing firm’s former president, Ramesh “Sunny” Balwani, were indicted by federal grand jury alleging that the two engaged in schemes to defraud investors, doctors and patients. Ms. Holmes stepped down as Theranos’ CEO and was replaced by general counsel David Taylor, though she remains the chair of the company’s board.
With the company already facing a dire cash situation, the indictments add to the suffocating pressure on Theranos. The indictments come three months after Ms. Holmes settled SEC fraud charges. Ms. Holmes had once earned adulation as the billionaire founder of Theranos, a company that promised to upend the medical laboratory industry with an innovative new method for drawing and testing blood. The fairy tale began to unravel almost three years ago when the Wall Street Journal began publishing a series of stories questioning the effectiveness of the company’s technology.