Blood testing company Theranos Inc said on Friday its founder, Elizabeth Holmes, would step down as chief executive officer, amid fraud charges leveled against the privately held firm.
Holmes agreed in March to settle “massive fraud” charges with the Securities and Exchange Commission under which she was barred from serving as an officer or director of a public company for 10 years.
Once called the Steve Jobs of biotech, Holmes started Theranos aged 19 and the company was soon considered a Silicon Valley darling with a $9 billion valuation based on its promise to disrupt the laboratory testing business.
Theranos claimed its innovative blood testing device would give quicker results using just a single drop of blood.
In 2015, the Wall Street Journal reported that Theranos’ devices were flawed and inaccurate, setting off a downward spiral for the company that had bagged investors including venture capital firm DFJ, Walgreens, media mogul Rupert Murdoch and Oracle co-founder Larry Ellison.
Earlier this month, a U.S. judge ruled investors who claimed that Theranos defrauded them into investing indirectly in the company by touting revolutionary blood-testing technology that never existed could not pursue their claims as a class action.
Holmes will remain chair of the company’s board and David Taylor, the firm’s general counsel, has been appointed its CEO, Theranos said.
Reporting by Tamara Mathias in Bengaluru; Editing by Maju Samuel