Ramesh “Sunny” Balwani, former Chief Operating Officer and President of defunct blood-testing start-up Theranos Inc., is fighting the nearly $900 million in restitution that U.S. prosecutors are proposing he pay to Theranos investors. Mr. Balwani is set to begin a 13-year prison sentence in March for defrauding investors and patients of Theranos with blood-testing technology that the company promised could perform numerous tests with only a few drops of blood. He is appealing his conviction. As Law360 reports, Mr. Balwani’s lawyers argue that he was not the cause of investors’ losses because he left the company in 2016, years before it collapsed. According to his lawyers, when Mr. Balwani left Theranos, the company had $350 million in cash and $100 million in “valuable IP,” and investors did not lose their money until years later due to decisions made by the board and Mr. Balwani’s former romantic partner Elizabeth Holmes, Theranos’ founder and former Chief Executive Officer. Ms. Holmes was convicted in a separate trial of defrauding investors, although she was acquitted of charges that she defrauded patients. She was ordered to serve 11 1/4 years in prison and is appealing her conviction.
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About Katherine M. Lenahan
Katherine M. Lenahan is a Partner in the New York office of Faruqi & Faruqi, LLP and focuses her practice on securities litigation.
Katherine M. Lenahan
Partner at Faruqi & Faruqi, LLP
New York office
Tel: (212) 983-9330
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