Financial fraud is a pervasive problem and seniors are often the ones victimized by the perpetrators of that fraud. A California securities fraud attorney should be consulted to provide representation in circumstances where a senior has been the victim of any kind of financial fraud. An attorney can help seniors who have experienced financial losses pursue recovery of the money they have lost and all other remedies available under California law, including an award of attorneys’ fees and costs for bringing the suit.
Unfortunately, there are many different types of financial misconduct that could lead to investors losing funds. Just recently, Think Advisor reported that the founder and CEO of a private company called Theranos, Inc. has been charged with fraud as a result of a year-long fraud scheme. The former president of the company was also charged as well.
The CEO and Former President of Theranos Have Been Charged With Financial Fraud
According to the article, the Securities and Exchange Commission (SEC) noted that the CEO and former president raised more than $700 million from investors through fraudulent means. They have been accused of exaggerating the financial performance of the company, as well as making false, exaggerated statements about the technology and business of Theranos.
The article further notes that the SEC complaints allege that the CEO and president made many false statements in investor presentations, during interviews to the media and when demonstrating their products. They allegedly claimed that their portable blood analyzer could revolutionize the blood test industry by conducting comprehensive blood tests from a single drop of blood from a pricked finger. This portable blood analyzer was their signature product but, it could not in fact do all that was promised.
Instead, the blood analyzer was able to conduct only a small number of tests. The article states that the majority of patient tests that were performed were conducted by the company on modified and industry-standard commercial blood analyzers that had been manufactured by other companies.
The CEO and president also reportedly claimed that Theranos products had been deployed by the Department of Defense and were currently being used in Afghanistan on battle fields, as well as in medevac helicopters. They alleged the company would receive more than $100 million in revenue from government contracts and other revenue sources, when in reality, the DOD had never used the Theranos products and the company generated just around $100,000 in annual revenue.
Because of the fraud, the founder has been stripped of control of Theranos, even though she was the person who created the company. According to the co-director of the SEC’s enforcement division, she will be required to return millions of company shares to Theranos and she has been barred from serving as a director or officer of a public company for a period of at least 10 years.
The co-director of the SEC enforcement division stated: “This package of remedies exemplifies our efforts to impose tailored and meaningful sanctions that directly address the unlawful behavior charged and best remedies the harm done to shareholders.”
Unfortunately, when fraud of this type occurs, many people end up losing money. In any situation where financial fraud has occurred, a California securities fraud attorney can provide representation to those who have suffered losses and help them recover compensation. To find out more about how an attorney can help you, contact Evans Law Firm online or call 415-441-8669 for a free initial consultation.