Theranos sued by one of its biggest investors, claiming fraud
One of Theranos Inc.’s biggest financial backers has sued the embattled startup and its founder for allegedly lying to attract its nearly $100 million investment, according to a fund document and people familiar with the matter.
Partner Fund Management LP, a San Francisco-based hedge fund, filed the suit in Delaware Court of Chancery on Monday afternoon, a letter to the hedge-fund’s investors says.
“Through a series of lies, material misstatements, and omissions, the defendants engaged in securities fraud and other violations by fraudulently inducing PFM to invest and maintain its investment in the company,” says the letter, which was reviewed by The Wall Street Journal.
The letter says Theranos, its founder Elizabeth Holmes and a former executive deceived the hedge fund by claiming it had developed “proprietary technologies that worked,” and was close to getting regulatory approvals.
A spokesman for Theranos said “the suit is without merit and Theranos will fight it vigorously.”
Source: MarketWatch
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