The Wall Street Journal has yet another essential report from inside the meltdown of biomedical company Theranos. The company, which is currently the subject of a criminal probe for allegedly misleading investigators and government investigators, is reportedly offering investors more shares in exchange for a promise not to sue them. 
 
 
 
 The Theranos disaster-saga began after a series of damming WSJ reports revealed that the company was fudging testing results from its flagship blood testing device. The company is currently being sued by Walgreens, its investor and one of its biggest partners. Walgreens actually had Theranos testing devices in its stores before the controversy broke. CEO Elizabeth Holmes was also banned from operating a lab for two years, and the company ended up shuttering its lab in Arizona. 
 
 Theranos’ plan to pay off potential plaintiffs with “about two additional shares for each share they bought” was approved by the company’s board in February, the Journal reports. The stock itself would come from Holmes’s personal shares, a stake Forbes analysts marked down from an estimated $4.5 billion to “essentially worth nothing” last June. 
 
 “This is an affirmative development for the company, providing a path forward in partnership with employees, investors and other stakeholders,” said Daniel Warmenhoven, director Theranos, according to the Journal. “Elizabeth elected to contribute her own equity to protect any dilution of shares held by other parties.” 
 
 Previously, Holmes had almost complete control over the company she started in 2003, so much so that the board of directors didn’t have the power to remove her. Investors still have to approve the newly reported pay off, but if they do, it’ll be interesting to see what happens to Holmes after she gives up the power she once held so closely. 
 
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 [The Wall Street Journal] ||||| CLOSE In 2014, they said she was the next Steve Jobs with her business secrets and innovation, but Elizabeth Holmes’ hot start-up Theranos didn’t last very long. USA TODAY 
 
 Theranos founder Elizabeth Holmes holds one of her bloodwork company's FDA-approved Nanotainers, where mere drops of blood are stored for complex tests. (Photo: Martin E. Klimek, Special for USA TODAY) 
 
 SAN FRANCISCO — Theranos founder Elizabeth Holmes was charged with "massive fraud" by the Securities and Exchange Commission on Wednesday, a downbeat coda to a once high-flying Silicon Valley start-up that promised to revolutionize the blood analysis process. 
 
 The SEC complaint charged that Theranos raised more than $700 million from late 2013 to 2015 while "deceiving investors by making it appear as if Theranos had successfully developed a commercially-ready portable blood analyzer" that could perform a full range of laboratory tests from a small sample of blood. 
 
 “But in reality, we allege that after years of development, Theranos was able to process just a small number of blood tests upon its proprietary analyzer, and instead conducted the vast majority of its patients’ tests on modified commercial analyzers that were manufactured by others,” Steven Peikin, the SEC’s co-director of enforcement, told reporters. 
 
 Holmes, 34, who once graced the cover of countless magazines and was worth billions on paper, has already settled the charges against her. 
 
 She will pay a $500,000 penalty, be barred from serving as an officer or director of a public company for 10 years, and return 18.9 million shares she amassed during the alleged fraud. 
 
 Holmes also cedes her voting control of the company she founded in 2003 at the age of 19 after dropping out of Stanford University in order to pursue her start-up. 
 
 Theranos and Holmes neither admitted nor denied the allegations in the SEC's complaint, and the settlements are subject to court approval. 
 
 Also charged was former Theranos president Ramesh "Sunny" Balwani. Among a variety of charges, the SEC complaint said Holmes and Balwani lied about the technology being used by the Department of Defense in battlefield situations. 
 
 Gen. James Mattis, who then led the U.S. Central Command, personally pushed Holmes' tech to be used although military regulators flagged issues with Theranos before the notion took wing. Mattis later joined Theranos' board but resigned from that position when he become U.S. Defense secretary in 2016. 
 
 Theranos board a Who's Who 
 
 Mattis was one of many famous names backing Holmes. The Theranos board often seemed like a Who's Who of historical figures, including former secretaries of State Henry Kissinger and George Shultz, former senators Sam Nunn and Bill Frist and former secretary of Defense William Perry. 
 
 CEO Elizabeth Holmes holds a "nanotainer" of blood at Theranos headquarters in Palo Alto, CA on Monday, June 30, 2014. Theranos has twice run afoul of federal lab regulators, and has voluntarily halted the use of the nanotainers pending FDA approval. (Photo: Martin E. Klimek, USA TODAY) 
 
 But regardless of such boardroom firepower, the company — which Holmes pitched as a salvation to those fearful of needles like herself — never delivered on its grand vision. 
 
 Promising a blood test that would require just a finger prick, rather than a vial of blood, Theranos forged ambitious partnerships with Walgreens and other outlets with a mission to install its Theranos Wellness Centers within miles of every American. Theranos' pilot program was conducted in dozens of Walgreens locations in Arizona. 
 
 Investors and partners signed on, pushing Theranos' valuation to $9 billion. Holmes was worth roughly half of that. Forbes, Fortune and Inc. all put her on their covers. Inc.'s headline: "The Next Steve Jobs." 
 
 A comprehensive investigation of Theranos launched in 2015 by The Wall Street Journal put an end to that euphoria. It cited unnamed employees who said the company was facing major problems with its Edison blood testing machines, the promised technological key to reinventing the blood analysis market. 
 
 Regulators started to circle, notably the Food and Drug Administration and the Centers for Medicare and Medicaid Services. Among the findings: In some cases, Theranos had to send the blood it had collected from patients out to traditional labs in order to conduct the required analysis of the samples. 
 
 In one case in 2015, examiners from Medicare inspected the company's lab, in Newark, Calif., and found deficiencies around Theranos' test for the clotting ability of blood, which is critical when determining the correct dose of blood thinners. Prescribing too much can result in internal bleeding, while too little can lead to a stroke. 
 
 Holmes said she would have the offending lab rebuilt. But Holmes' problems only grew. Lawsuits flew and regulators pressed on. Holmes stuck by her story but gradually refocused her efforts on perfecting the device that she claimed was capable of doing complex bloodwork from just a drop of blood. 
 
 Theranos founder Elizabeth Holmes told Pepperdine University graduates that their lives should be focused on doing good for others. (Photo: Pepperdine University) 
 
 Last spring, Theranos agreed to pay Arizona consumers $4.65 million under a consumer-fraud settlement brought by more than 175,000 consumers who purchased Theranos tests at Arizona retail locations since 2013. 
 
 The Arizona agreement came a day after Theranos announced a settlement with the Centers for Medicare and Medicaid Services, resolving federal regulators' efforts to revoke that company's laboratory certificate. 
 
 Under both the Arizona and federal settlements, Theranos agreed to a two-year ban from the blood-testing business and paid a $30,000 civil penalty as part of the federal settlement. 
 
 The fact that a tech company managed to rake in close to a billion dollars to fund a project that seemed revolutionary but also problematic speaks to the often unchallenged nature of some Silicon Valley ventures. 
 
 Part of that comes down to the stardust often sprinkled on tech founders, as the news media ate up the story of Holmes and her disruptive idea. But part stems from the fact that, in many instances, tech entrepreneurs do deliver on the implausible. 
 
 Consider Elon Musk. He's gone from helping start a payment company (PayPal) to launching rockets to Mars and building the nation's first all-electric car company, both against considerable odds. 
 
 More: Embattled Theranos founder announces layoffs, strategic shift 
 
 More: Theranos founder banned from running lab for two years 
 
 More: Theranos lab poses 'immediate jeopardy' to patients, say regulators 
 
 But what stood out in the case of Theranos was how the company and its founder rose to great heights while keeping its vital details cloaked in secrecy. 
 
 Dressed all in black like her idol, Apple co-founder Steve Jobs, Holmes typically spoke in broad terms and of grand visions rather than blood analysis specifics. 
 
 "We are patient, and we're building this company for the very long term," she told USA TODAY in a 2014 interview after bringing Theranos out of stealth mode. "We're looking to reshape the system." 
 
 But while Holmes sat for many interviews, she never shared her the secret sauce: how Theranos was managing to do complex blood analysis with a mere drop of blood sourced from a finger prick and stored in its patented Nanotainers. Typically blood tests require vials of blood extracted with needles. 
 
 Elizabeth Holmes, founder and CEO of Theranos, which just announced it would expand its blood testing services to central Pennsylvania. (Photo: Martin E. Klimek, Special for USA TODAY) 
 
 SEC official Peikin said the agency's ruling sounds a cautionary note for investors who consider putting their money into start-ups that are long on promises and short on specifics. 
 
 “Investors should ask questions,” he said. “Private companies and particular early stage private companies carry additional risks, they’re not subject to the same kinds of oversight and disclosures that public companies are and investors in these companies need to be wary.” 
 
 A few fundamental Theranos questions remain: Did Holmes simply promise too much too soon? Did she underestimate her team's ability to develop a revolutionary new blood analysis system that only required a drop of the liquid? 
 
 Or was there never any such intention and Theranos was an elaborate fraud from the beginning? 
 
 Back in 2014, Holmes spoke convincingly about how her company was going to succeed by dint of hard scientific work alone. 
 
 "We had to redevelop that analytical system to handle small volumes," she said proudly. "We had to build the infrastructure around it all through software and automation to minimize the involvement of humans, where manual error could be great. It's software, hardware and chemistry. 
 
 Holmes paused. "There's no shortcut," she said. 
 
 Words that perhaps Holmes herself ultimately didn't heed. 
 
 Contributing: Kevin McCoy in New York. 
 
 Follow USA TODAY tech writer Marco della Cava on Twitter 
 
 Read or Share this story: https://usat.ly/2FGOnHS ||||| Theranos, led by CEO and founder Elizabeth Holmes, raised more than $700 million on the promise of a revolutionary blood-testing technology that never materialized. The Securities and Exchange Commission just charged Holmes with “massive fraud.” 
 
 Lisa Lake / Getty Images Elizabeth Holmes in 2015 
 
 Elizabeth Holmes once dazzled the world with a story that seemed almost too good to be true: Theranos, her Silicon Valley startup, was going to revolutionize medicine with its blood-testing technology. Now Holmes’ corporation — once valued at $9 billion — has crumbled. On Wednesday, the Securities and Exchange Commission charged Theranos, Holmes, and Ramesh Balwani, the startup’s former president, with “massive fraud.” They are accused of raising more than $700 million from 2013 to 2015 through an “elaborate, years-long” series of lies and exaggerations about the company’s business, finances, and technology. Theranos and Holmes have agreed to settle the fraud charges. Pending court approval, the CEO and founder will pay a $500,000 penalty, surrender nearly 19 million shares for a significant cut in equity, and give up majority voting control of Theranos. She’ll also be barred from serving as an officer or director of a public company for 10 years. Balwani’s claims will be litigated in court. “The Theranos story is an important lesson for Silicon Valley,” Jina Choi, director of the SEC’s San Francisco Regional Office, said in a statement. “Innovators who seek to revolutionize and disrupt an industry must tell investors the truth about what their technology can do today, not just what they hope it might do someday.” Here are the biggest lies and exaggerations that Holmes, Theranos, and Balwani told, all according to the SEC. Theranos did not return a request for comment. 1. The fundamental falsehood: Theranos’s blood-testing technology simply didn’t do what the company repeatedly told investors, clients, and the media it could, the SEC alleged. Holmes’ story was irresistible: Her special machine could run hundreds of blood tests on just a few drops of blood. And this machine — which in later versions was called the miniLab — was supposedly faster, cheaper, and more accurate than all the other blood-testing lab equipment out there. But even though Theranos said it could run 200 tests, Holmes and the rest of the company knew that their machine could only do a dozen or so, the SEC alleged. For the vast majority of its tests, Theranos in fact was using equipment already on the market. Yet Holmes hid this crucial fact and told investors that Theranos only used its own equipment. 
 
 Mike Windle / Getty Images NBC News' Maria Shriver interviews Holmes at the Vanity Fair New Establishment Summit at Yerba Buena Center for the Arts in 2015. 
 
 2. Theranos gave fake demonstrations when it was striking deals with one of its major clients, Walgreens. According to the SEC, Holmes struck up major deals to put miniLabs in Walgreens and Safeway stores based on fraudulent claims about how Theranos’s technology worked. (The SEC complaint refers to them as a “large national pharmacy chain” and “a large national grocery chain.”) But according to the SEC, Holmes didn’t just say that the technology worked — she also went to great lengths to make it look like it worked. In July and August 2013, Theranos did demonstrations for Walgreens executives before the miniLabs’ store launch. Holmes told her employees to put Theranos’s equipment in the room where they were collecting blood samples from the executives — but instead of processing the blood on the Theranos machines, employees secretly ran some tests on outside lab equipment, according to the SEC. Based on those presentations, at the end of 2013, Walgreens executives agreed to more quickly hand over a portion of a $100 million “innovation fee” to help Theranos roll out in the stores faster. But those testing centers also relied on outside lab equipment. No one at Theranos ever told the executives the truth, according to the SEC. Holmes kept up the charade for years, telling investors that the partnerships with Walgreens and Safeway were thriving, when in fact they’d stalled as executives started to have concerns. In 2016, Walgreens sued Theranos, seeking $140 million to recover what it had put into the partnership (the lawsuit was reportedly settled for less than $30 million). Walgreens once hosted about 40 Theranos blood-testing centers. Safeway broke off its deal after spending $350 million to build clinics for Theranos’s tests in more than 800 supermarkets; Theranos never ran any tests in Safeway stores. 
 
 Jp Yim / Getty Images Former president Bill Clinton speaks to Elizabeth Holmes in 2015 in New York City. 
 
 3. Theranos also gave investors fake demonstrations and misleading information about its clinical trials. When visiting Theranos, potential investors would have their blood sampled and taken away for processing, leaving them with the impression that it was being tested on one of Theranos’s devices. But Theranos often tested the blood on outside equipment because its own equipment wasn’t capable of doing all the tests it was offering, according to the SEC. (At one point, Holmes and Balwani told one investor that Theranos could process tests for more than 1,000 conditions.) Investors also got binders with information on clinical trials that Theranos had supposedly run with pharmaceutical companies. The reports “prominently featured the company logos of well-known pharmaceutical companies, suggesting that the reports were drafted by these pharmaceutical companies,” according to the SEC. But only one report was cowritten by a pharmaceutical company. The other two were actually written by Theranos employees. From late 2013 to 2015, investors pumped more than $700 million into the company in two financing rounds. 
 
 Mike Blake / Reuters 
 
 4. Holmes lied about Theranos’s military contracts. Holmes told multiple investors that Theranos’s technology had been deployed by the US Department of Defense in the battlefield, in Afghanistan, and on medevac helicopters that transported casualties. It’s true that Theranos’s technology was used in a Department of Defense burn study — but it was never actually used in the battlefield, in Afghanistan, or on medevac helicopters. 
 
 Mike Blake / Reuters 
 
 5. Theranos said it was going to make $100 million in a year when it made about $100,000. Theranos told investors it was going to generate more than $100 million in revenue and break even in 2014, and that it was on track to generate $1 billion in 2015. That rosy picture couldn’t have been further from the truth. The company in fact had just over $100,000 in revenue in 2014, and was “nowhere near” generating $100 million by year’s end, according to the SEC. 
 
 Steve Jennings / Getty Images 
 
 6. Holmes said that Theranos didn’t need to get FDA approval. It did. From 2013 to 2015, Holmes repeatedly told potential investors that Theranos didn’t need to get FDA approval for its equipment and tests, but was voluntarily applying for it anyway because it was the “gold standard.” But in late 2013 and throughout 2014, the FDA told Holmes, in meetings and in letters, that approval was in fact necessary. So Holmes submitted Theranos’s tests to the FDA for clearance — while raising money and telling investors that the process was voluntary. 
 
 Forbes
– She was the first female founder of a Silicon Valley startup to become a billionaire before it all came crashing down. Now Elizabeth Holmes' personal fortune is gone, and she has just settled with federal regulators who say her company, Theranos, lied to investors about its supposedly revolutionary blood-testing equipment. Holmes, 34, forfeits control of the company, is barred from serving as an officer or director of any public company for a decade, and must pay $500,000, reports the AP. And her troubles may be just beginning. The Wall Street Journal reports that she still faces a criminal investigation being led by the US attorney's office in San Francisco. Details and developments: The biggest lies: BuzzFeed runs down the seven biggest Theranos lies, and they revolve around one central one: claims that its "special machine could run hundreds of blood tests on just a few drops of blood." A stunt involving Walgreens, a former partner, is illustrative. Theranos collected blood samples from Walgreens execs but processed those samples in outside lab equipment. The wowed Walgreens execs, however, were led to believe the blood was processed on the Theranos equipment in the meeting room, per BuzzFeed.