Securities fraud can cost you time and money. In some cases, you might be stripped of voting rights and other duties that come with being involved in publicly traded companies. Elizabeth Holmes, founder of Theranos Inc., recently entered into a deal with the U.S. Securities and Exchange Commission (SEC) that has several implications for her future.
The deal comes from the accusations of massive fraud. The SEC noted that the offer and sale of securities from Theranos from a two-year period starting in 2013. It was alleged that Holmes, along with another individual involved in the business, exaggerated about the company’s performance, technology and business. The deceptions noted had to do with an alleged portable blood analyzer that didn’t perform as stated.
As part of the deal that she reached with the SEC, neither she nor the company had to admit any wrongdoing. The woman has to return a total of $18.9 million in stock shares. She can’t serve as an officer or director of a company that is publicly traded for 10 years and has to pay a $500,000 fine.
The other man who was involved in the case hasn’t reached a deal in the matter. It remains unclear how his case might be resolved.
For Holmes, the fact that this matter is behind her now is probably a relief. She does have to think about how the terms of the deal with impact her in the future. At 34 years old, she will likely have plenty of time to develop a new career path. Still, having to start all over for this reason is likely a hard pill to swallow.
Source: ABC News, “Theranos founder Elizabeth Holmes settles with SEC in alleged ‘elaborate, years-long fraud’,” Rebecca Jarvis and Taylor Dunn, March 15, 2018