Theranos, a health technology company, has been in the news for all the wrong reasons in the recent past. Now, its CEO Elizabeth Holmes, and former President, Sunny Balwani have been indicted by a US Court on nine counts of wire fraud, and two counts of conspiracy to commit wire fraud. Although the board of the company has said that Holmes will continue to serve the company as Chairperson of the Board, it will be interesting to see how this will be managed if the indictments lead to prison sentences, something that would put this duo behind bars for many years to come. The older former president, Balwani, aged 54, has claimed no wrongdoing on his part, which had his legal counsel Jeffrey Coopersmith say, “Mr. Balwani looks forward to trial because he did not defraud anyone, and it will be an honour to defend him vigorously.”
Having started the company at the age of 19, Holmes had built up the nine billion dollar business on a series of false claims for the last fifteen years. With Balwani acting as an “enforcer” according to some witnesses and insiders, they managed to snuff out negative comments and questions that were aimed at the veracity of the testing prowess that they claimed their product to have over other rivals. The cracks began to show before long, however, and this current indictment came close on the heels of SEC filing civil charges amounting to fraud, which Holmes cleared. Another condition resulting from this fraud charge was the fact that she would not be permitted to serve on the board of a publicly held company, as either an officer or a director, for a period of ten years.