Health technology company Theranos is being investigated for fraud after it reportedly misled people about its operations and the technology it uses. The probe is in line with the company's promise to offer a painless and cheap alternative to test blood.
According to Daily Mail, the Silicon Valley startup is under close supervision by the US Attorney's Office and the Securities and Exchange Commission after earlier reports questioned its technology and claims. The company has reportedly answered all the allegations in a memorandum meant for its partners.
"The investigations by the SEC and the US Attorney's Office, which began following the publication of certain news articles, are focused on requesting documents and ongoing," the memorandum read. This was Theranos' explanation about the probe which started due to accusations that the company is using equipment which are also widely used by similar companies.
The New York Times said the major deficiency in the system of Theranos involved its test the clotting ability of blood which is utilized to know the proper dose of warfarin, a blood-thinning drug. The same report said that an excess of warfarin in the body will likely result in internal bleeding.
Theranos has reportedly expressed their intent to make up for this deficiency but regulators said that this is still not an act of compliance on their part. "It does not constitute a credible allegation of compliance and acceptable evidence of correction for the deficiencies cited," read a statement from the regulators quoted by The New York Times.
In a statement on NBC Bay Area, Theranos founder Elizabeth Holmes said she feels devastated on not being able to see the problems early on. "I feel devastated that we did not catch and fix these issues faster," she said.
"I'm the founder and CEO of the company; anything that happens in this company is my responsibility," Holmes added. Despite the problems, the Holmes said she is positive the company will make it through this difficult stage.
