Theranos has settled a pair of lawsuits filed by an investor that claimed the embattled blood-testing company misled it to attract a nearly $100 million investment.
The settlement announced Monday resolves a lawsuit filed by hedge fund Partner Fund Management in October that accused Theranos of engaging in securities fraud through a "series of lies" to secure a $96 million investment. Another filing in April by PFM accused Theranos of misleading directors by using a shell company to "secretly" buy commercial lab equipment and faking blood tests in presentations with prospective investors and business partners.
Terms of the settlement will remain confidential, Theranos said in a statement.
"Theranos is pleased to have resolved both lawsuits with PFM," Theranos general counsel David Taylor said in a news release. "Although we are confident that we would have prevailed at trial, resolution of these two cases allows our tender offer to go forward and enables us to return our focus where it belongs, which is on executing our business plans and delivering value for our shareholders."
It's the latest twist in a downward spiral of a once-promising company that set out to innovate blood testing. Two years ago, it was valued at $9 billion. But it has faced increased scrutiny, along with civil and criminal investigations, since a Wall Street Journal report in October 2015 suggested Theranos' blood-testing devices were flawed.
In July, the CMMS revoked the company's Clinical Laboratory Improvement Amendments certificate, an action that prohibits Theranos CEO Elizabeth Holmes from operating a lab for two years. A week before PFM filed its lawsuit in October, Holmes announced plans to shut down all its clinical labs and Theranos Wellness Centers, closures that will result in 340 employees being laid off.
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