The SEC isn't sending Theranos CEO Elizabeth Holmes to jail for fraud — here are her punishments

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March 14, 2018 7:06 PM

Elizabeth Holmes won't go to jail after being charged with "massive fraud" as she fundraised for blood-testing startup Theranos.

Elizabeth Holmes has been charged with engaging in a "massive fraud" by the Securities and Exchange Commission
She won't be going to jail over this

Elizabeth Holmes, the founder of blood testing startup Theranos, has been charged with engaging in a " target="_blank"massive fraud" by the Securities and Exchange Commission. The SEC says she and the company's president raised more than $700 million using an "No, she won't be going to jail over this. In fact, even though she faces some serious penalties over the charge — she's losing control of the company and won't profit if it is sold — she also doesn't have to admit wrongdoing as part of a settlement with regulators. To recap, Theranos was once a Silicon Valley favorite because of its promise that its technology could allow for a wide variety of blood tests with just a droplet of blood. That all began to fall apart when the Wall Street Journal raised serious questions about the accuracyThe SEC investigation has been underway since 2016, and it's not the only one. The Department of Justice is also investigating the matter — but that's a separate case. That one, in theory, could lead to criminal charges, but the SEC reportedly wouldn't comment on the matter.This is pretty standard practice with the SEC. The regulator explains on its website that, while it works with law enforcement agencies, it's investigations lead to civil or administrative actions. It routinely penalizes brokers and traders by banning them from working in the industry or accepting outside money. One of the highest-profile cases the SEC brought against a biotech CEO was with Sam Waksal, the CEO of Imclone, who was accused of insider trading. He also didn't admit or deny wrongdoing. Waksal did serve jail time for charges including

Here's are some of the things Holmes has agreed to do to settle with the SEC.

A court still has to approve the settlement with Holmes, and Theranos'

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