Robertson Stephens Co-Founder Sues Theranos And Elizabeth Holmes For Fraud
In what is not the first lawsuit (and certainly won’t be the last) by naive shareholders to go after former unicorn darling-turned-fraud Theranos, its founder Elizabeth Holmes, and COO Ramesh Balwani, the co-founder of prominent dot com investment bank Robertson Stephens, Robert Colman, accused Theranos and Holmes of making false and misleading claims about its operations and technology while soliciting money from investors.
The pioneering Silicon Valley deal maker invested in the blood-testing company in late 2013 through venture-capital fund Lucas Venture Group, according to the lawsuit. The suit was filed in federal court in San Francisco and seeks class-action status. The WSJ first reported of the legal action.
In the lawsuit Colman says that he agreed to invest in Theranos after Lucas Venture Group founder Donald A. Lucas wrote in a Sept. 9, 2013, letter that Theranos invited the venture-capital firm to purchase $15 million in stock. As the WSJ adds, Lucas said it was part of a ‘follow-on extension’ of a funding round that began in 2010, the lawsuit states. On the same day in 2013, Theranos and Walgreens announced in a joint news release what they called ‘a long-term partnership to bring access to Theranos’ new lab testing service through Walgreens pharmacies nationwide.’ Walgreens is now a unit of Walgreens Boots Alliance Inc.
From the filing:
This post was published at Zero Hedge on Nov 28, 2016.