Report: Theranos being investigated by Securities and Exchange Commission
Theranos, the embattled blood testing startup, is now under investigation by the U.S. Securities and Exchange Commission, as well as the U.S. Attorney's Office for the Northern District of California, according to Bloomberg.
The investigation is the latest in a series of hardships for the once-vaunted company, coming on the heels of a recommendation by the Centers for Medicare and Medicaid Services that founder Elizabeth Holmes be banned from the blood testing business for a two-year period.
In March, a study in the Journal of Clinical Investigation found that cholesterol test results obtained through Theranos – which are drawn from small finger pricks – were much different than those from large laboratory companies, implying that doctors' medical decisions could be thrown off by results acquired through Theranos technology.
[Also: Theranos results differed from Quest, LabCorp enough to impact care decisions, study finds]
In all, Theranos' results for total cholesterol were found to be an average 9.3 percent lower than those obtained through clinical laboratories Quest and LabCorp, according to the March study. This has lead researchers to surmise that in some instances, doctors may inappropriately begin, or fail to begin, statin therapy, a drug-based regimen that aims to prevent heart disease.
The investigation by the SEC, which ensures companies give accurate information to investors, was one of several described in a memo from Theranos (once valued at $9 billion) obtained by Bloomberg. The memo was originally furnished to Theranos' partners including Walgreen's, which has reportedly been looking to cut ties with the startup.
"The company continues to work closely with regulators and is cooperating fully with all investigations," Theranos officials said.
Before the federal investigations were announced Monday, Holmes appeared on NBC's Today show to say she was "devastated" that her lab did not discover its deficiencies. Holmes also said Theranos would rebuild its lab from scratch to avoid future problems.
In addition to suggesting that Holmes be temporarily banned from the industry, CMS has proposed a number of other sanctions, including revocation of Theranos' Clinical Laboratory Improvement Amendments of 1988 certificate – or, alternatively, a civil monetary penalty of $10,000 per day for each day of non-compliance. Theranos could delay the effective date of the sanctions by filing an appeal.
Twitter: @JELagasse
