Theranos, the13-year-old health technology startup, is being sued by two more investors who say they were lied to about Theranos’s health and its prospects by founder Elizabeth Holmes and the firm’s former president and COO, Ramesh “Sunny” Balwani, who was reportedly long one of the Holmes’s closest confidants.
The suit is the third that Theranos has been slapped with in recent months, following a $140 million lawsuit filed earlier this month by Walgreens, a former laboratory testing partner that is now seeking the amount of money it invested in the company; and a separate suit filed by the San Francisco-based hedge fund Partner Fund Management, which told its backers that Theranos had fraudulently induced it to invest through a web of ” lies, material misstatements, and omissions.”
One of the plaintiffs, Hilary Taubman-Dye, is a longtime technical recruiter who now works in investor relations for a TV production company, shows LinkedIn. According to the lawsuit, she purchased Theranos shares on the secondary shares platform SharesPost at $19 per share in August 2015. The suit also describes Taubman-Dye’s failed efforts – along with those of others who’d used SharesPost to buy stock in the company – to cancel the transaction after the WSJ began publicly questioning the about the company.
The second plaintiff – Robert Colman – is known in some Silicon Valley circles for having cofounded the once powerful Silicon Valley boutique investment bank Robertson Stephens. In the suit, Colman says he invested in Theranos in 2013 through Lucas Venture Group, a venture firm founded by a second-generation VC named Donald Lucas whose other bets include the data analytics company Palantir.
In fact, says the suit, Lucas “directly solicited” Colman’s investment in Theranos’s Series G round “at the invitation of Theranos and Holmes,” an invitation that it says was “purportedly a favor to Lucas, whose father, also Donald Lucas, originally funded Theranos and ‘mentored’ Holmes.”
The younger Lucas it says, had represented himself as a strategic advisor to Theranos. The elder Donald Lucas is 86 years old, has been a self-employed venture capitalist since 1960, and at at one point, was the chairman of the board at Theranos. He was also a director on the boards of Oracle and Cadence Design Systems until 2013, among his many other commitments.
According to the suit, the second plaintiff, Hilary Taubman-Dye – a longtime technical recruiter who now works in investor relations for a TV production company, shows LinkedIn – purchased Theranos shares on the secondary shares platform SharesPost at $19 per share in August 2015. The suit also describes Taubman-Dye’s failed efforts to cancel the transaction after the WSJ began publicly questioning the about the company.
The lawsuit seeks class action status for anyone who “directly or indirectly purchased or committed to purchase Theranos securities from July 29, 2013, through October 5, 2016.”
The entire filing can be found here.