Earlier this year, the SEC announced a “Silicon Valley Initiative,” reflecting the agency’s concerns about private and pre-IPO companies that were scoring sky-high valuations in private offerings. The agency said that it is particularly focused on so-called “unicorns” – that is, private companies with valuations greater than $1 billion. Although the agency did not name any of the specific companies in which it was interested, it soon became clear that one of the companies the agency was investigating was Theranos, the start-up company whose blood-testing technology and practices have recently gained media and regulatory scrutiny. The SEC’s scrutiny of a private company’s fund-raising practices was itself noteworthy; now, in yet another notable development, the privately-held company has drawn an investor lawsuit alleging securities fraud.
Continue Reading Hedge Fund Investor Launches Fraud Lawsuit Against Theranos