Hagens Berman Announces Investigation of Theranos, Inc. Relating to Representations Made to Investors
SAN FRANCISCO - Hagens Berman Sobol Shapiro LLP is investigating Theranos, Inc. for potential violations of the securities laws. If you suspect that you may have losses in your investments in Theranos, Inc. or have knowledge relevant to the investigation, contact Hagens Berman Partner Reed Kathrein, who is leading the firm’s investigation, by calling 510-725-3000, emailing [email protected] or visiting https://www.hbsslaw.com/cases/theranos.
Between February 2014 and March 2015, Theranos reportedly sought to raise over $632 million from investors selling Series C-2 preferred shares for $17 per share, and was valued at $10 billion. Theranos had plans to seek another $200 million from the sale of Series C- 3 preferred shares for $20 per share in October 2015. However, the plan to sell more shares may have halted upon the publication of recent articles, particularly by the Wall Street Journal, which have questioned the credibility of Theranos’s technology and management. Specifically the articles question the Company’s claims to have a marketable technology which would allow Theranos to conduct hundreds of types of blood tests via a finger-stick rather than using vials of blood, like in traditional tests. The news reports also questioned Theranos claims to have had partnerships with GlaxoSmithKline and Pfizer, which both companies reportedly denied.
After these reports, Walgreens suspended their plans to roll out Theranos's testing services in their stores, and the press reported that Safeway cancelled a $350 million agreement to use Theranos's testing technology amid doubts about its accuracy. In addition, the Cleveland Clinic distanced itself from Theranos's technology and denied they had verified its accuracy.
Since, Theranos has promised to be more transparent, but little new data has been revealed. In fact, the Journal stated that Theranos shared access to its senior scientists and certain documents, it was told the information could not be disclosed publicly. Apparently, the information was not enough to halt the paper’s investigation. On December 20, the Wall Street Journal revealed that U.S. health regulators are investigating complaints by two former Theranos employees regarding testing practices and tainted research protocols. Then, on December 27, 2015 the Journal reported that two former employees are accusing Theranos of deleting the quality control data of its proprietary machines and cherry-picking data when comparing those machines with traditional lab machines.
If you are an investor in the Series C rounds, or any other form of investing in Theranos, or have information relevant to our investigation, please feel free to contact us. At this stage, Hagens Berman is only investigating this matter and Theranos’s claims.
Whistleblowers: Persons with non-public information regarding Theranos should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the SEC whistleblower program, whistleblowers who provide original information may receive rewards up to 30 percent of any successful recovery made by the SEC. For more information concerning your whistleblower options, call Reed Kathrein at (510) 725-3000 or email [email protected].
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Reed Kathrein, 510-725-3000