Investor to Theranos: Give us back our $96 million

It's hard to know who to feel less sorry for - a Silicon Valley company with a portfolio of quackery and deceit or the San Francisco hedge fund that was bamboozled into investing $96.1 million in it? On Monday, Partner Fund Management LP filed a lawsuit against Theranos in an attempt to get its money back. A letter to its investors said, "Through a series of lies, material misstatements, and omissions, the defendants engaged in securities fraud and other violations by fraudulently inducing PFM to invest and maintain its investment in the company."

From the Wall Street Journal:

The suit is the first sign of trouble from investors who poured about $800 million into the company, and then remained silent as it navigated a challenging year that began when the Journal first reported on shortcomings in its operations and technology last October.

[Founder Elizabeth] Holmes had said Theranos could accurately perform dozens of tests using a few drops of blood, a premise that drove the firm to a valuation of $9 billion in a 2014 fundraising round. The Journal's investigation showed it used its flagship technology for a small number of tests, relied on devices made by conventional manufacturers and released questionable test results to patients.

Since then, Theranos has voided tens of thousands of test results, faces federal civil and criminal investigations, and is appealing a regulator's revocation of its blood-testing license at a California lab.

Good luck getting your money back, PFM. And good luck with your pivot, Theranos.