The self-made billionaire once called the next Steve Jobs was charged with "massive fraud" for "deceiving investors" Wednesday, USA Today reports. Elizabeth Holmes founded Theranos in 2003 at the age of 19 and raised over $700 million from investors. But the Securities and Exchange Commission says Holmes and Theranos exaggerated and lied to investors between 2013 and 2015, promising a "commercially-ready portable blood analyzer" that could run hundreds of tests on a single prick of blood for much less than the cost of current blood tests. According to CNBC, the SEC says of the over 200 tests Theranos was promising, it could at points only perform 12. It also found Theranos was performing most of its tests on traditional machines developed by other companies, the New York Times reports.
Holmes and Theranos have already agreed to settle the charges without admitting or denying the fraud allegations. Holmes will pay a $500,000 penalty, lose control of Theranos, give up 18.9 million shares, and be barred from being a director or officer for any public company for a decade. The fraud case was filed in civil court; the SEC won't say if a criminal investigation is underway. The SEC charged Ramesh Balwani, former Theranos president and Holmes' ex-boyfriend, with participating in the fraud. It alleges he helped lie about the Defense Department using Theranos' technology on the battlefield. "The Theranos story is an important lesson for Silicon Valley,'' an SEC director says. ''Innovators who seek to revolutionize and disrupt an industry must tell investors the truth about what their technology can do today, not just what they hope it might do someday.''