Theranos is getting deep in trouble as it has been hit with another lawsuit. The embattled firm has already been sued by Walgreens and Partner Fund Management. The latest case is the first class-action suit against the company.
The litigants claim that Theranos CEO Elizabeth Holmes lied about the technology used for carrying out blood tests. The lawsuit cites various investigations conducted by the Securities and Exchange Commission and the US Justice Department. The case was filed on Monday in a federal court in San Francisco.
The case was filed by investor Robert Colman, who had bought Theranos shares through Lucas Venture Group XI LLC. Colman is the co-founder of the now-defunct Robertson Stephens investment firm.
Colman is joined by Hilary Taubman-Dye in the lawsuit. She had bought the company's shares through SharesPost Inc. The case is being handled by the Hagens Berman Sobol Shapiro law firm, which is now seeking other investors to join this class-action lawsuit.
Theranos was first sued by San Francisco-based hedge fund, Partner Fund Management (PFM), which accusedthe company of lying, making omissions, and material misstatements. Its letter to the investors stated, "the defendants engaged in securities fraud and other violations by fraudulently inducing PFM to invest and maintain its investment in the company."
Earlier this month, Theranos received yet another setback as it was sued by Walgreens for $140 million. The drug store company alleged that the blood testing firm had made misleading claims and sued it for the breach of the contract.
Walgreens formally terminated its collaboration with Theranos in June this year, following the company voiding a number of test results. Walgreens also moved to close 40 Theranos Wellness Centers at various Walgreens locations in Arizona.