Key Investor Sues Theranos on Allegations of Fraud

Theranos

The problems currently facing Theranos are showing no sign of abating soon after a major investor filed a lawsuit against the American health technology company and its founder for lying to investors to raise funds.

Partner Fund Management, one of Theranos’ biggest investors, on Monday filed a lawsuit against the medical-testing firm in Delaware Court of Chancery, accusing it of lying about performance to raise nearly $100 million in investment.

“Theranos and its principals knowingly and repeatedly lied that they had developed proprietary technologies that worked, were on the cusp of receiving all necessary regulatory clearances and approvals, and concealed the truth about the commercial viability of their technologies and methods,” the San Francisco-based hedge fund said in a statement.

Partner Fund is seeking in the suit filed under seal to have a stock-purchase agreement with Theranos to be overturned.

The suit was the first of several expected from investors following recent scandals surrounding the activities of the health technology company, the capability of whose technology has come under intense scrutiny. The Palo Alto, California-based firm is reportedly being investigated at both federal and state levels.

In a statement released Monday, Theranos dismissed the lawsuit filed against it by Partner Fund, saying the complaint lacked merit. It stated readiness to fight the complaint “vigorously.” The company noted that most the statements credited to it in the suit were made after the hedge fund had already made its investment and, as such, could not have served as the main basis for investment.

Founder Elizabeth Holmes had claimed that her company was able to perform dozens of tests and produce accurate results using just a few drops of blood, unlike what rival companies offered. This contributed to boosting Theranos’ valuation to about $9 billion in 2014 and making investors put around $800 million into the firm.

Partner Fund invested $96.1 million in Theranos in February, according to Bloomberg, which cited an anonymous person familiar with the matter.

A report by the Wall Street Journal last October raised questions about the accuracy and reliability of the health technology firm. Investigation by the newspaper revealed that the company only used its own in-house technology for only a little portion of tests carried out, while the most were done using equipment made by traditional manufacturers.

Theranos and Holmes were sanctioned by U.S. regulators in July following discovery of systematic shortcomings in laboratory testing, putting patients’ health at risk. A two-year ban from owning or operating a laboratory was also considered against the company’s founder.

Theranos, which has already voided thousands of test results, currently has an appeal pending against the sanctions imposed on it.

Last week, Holmes announced the closure of the company’s blood-testing labs and wellness centers. The decision led to the dismissal of 340 employees.

The Theranos founder has revealed that the firm would shift its attention from blood-testing to developing and selling products to external laboratories. She said the company would now give its “undivided attention” to commercializing its miniLab tool said to be capable of producing more accurate results from a few drops of blood.

Bloomberg reports that another set of investors filed a lawsuit against Theranos in the same Delaware court on Tuesday.

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Chase Sapphire Reserve Credit Card Goes Viral

CHASE SAPPHIRE RESERVE

While you may be trying to decide on a credit card, one card has already gone viral, making it of obvious interest to anyone in a quandary over a credit card pick. People are even seen on YouTube, boasting to everyone about owning their precious new credit card – the one that displays a metallic rectangle. Blogs and message boards are also obsessing over the Chase Sapphire Reserve Credit card. On Reddit alone, the card has already sparked as many as 6,000 comments.

The card is so popular that JPMorgan Chase, the card’s issuer, ran out of the card’s fancy engraved metal stock after only 10 days, requiring the company to send a temporary plastic placeholder out to disappointed consumers.

As a result, large credit card issuers are in a type of arms race, all of them introducing tempting rewards programs to catch the attention of affluent customers who spend large amounts of money on recreation and travel. However, these same customers do not want to be bound to a specific airline or hotel’s rewards program.

While the Chase Sapphire Reserve card comes with a $450 annual fee, it still offers a bottom-line value proposition. Matt Schulz, who is an analyst for CreditCards.com, made the following comment. He said, “American Express used to have a stranglehold on the high-end market, but folks like Chase and Citi are coming hard after their crown.” He added, “It’s the best time in years to shop for a rewards card.”

Historically, the Platinum card featured by American Express was a trailblazer of the premium category and its unrivaled champion. However, in 2014, Citi upgraded its high-end Prestige credit card to compete with the Platinum card. The Prestige, like the Platinum card, offered free hotel stays, transferable points that were redeemable for upgrades and airfares, and access to private golf courses and lounges at airports. The card offered spending incentives that permitted customers to cash in more quickly.

One spokeswoman for Chase, Amy Bonitatibus, spoke about the phenomenal response of the Sapphire Reserve. She said, “It significantly exceeded our expectations.” The card has been a particular hit with millennials, who make up the majority of cardholders. Given that many millennials are turning down credit card offers, this small detail is definitely noteworthy in the credit card industry.

Most of the consumers have fallen for the perks and rewards of the Chase Sapphire Reserve. In fact, according to one financial expert, the rewards are so good, people are afraid some of them might be taken away.

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Manitoba Looking to Proposes New Payday Loan Regulations

New Regulations

Earlier this month, the government of Manitoba announced new consumer protection rules that aim to protect citizens from costly payday loans. The latest round of regulations came into effect this month, and lenders were provided with 48 hours to revise their products.

The Justice Ministry decided to rein in the short-term, high-interest loan industry after numerous complaints of confusing terms, a growing number of people entering into endless cycles of debt and plenty of concerns from municipalities.

Under the new rules, businesses that provide consumers with high-cost credit products will be required to be licensed under the province’s Consumer Protection Office. Payday loan stores like Landmark Cash will also be mandated to provide potential borrowers with a detailed information disclosure document that outlines all of the costs, fees and other charges related to the financial product. Also, payday loan companies must display clear signage that explain related cost and fees.

One of the biggest changes that will affect the entire industry is the rule that allows borrowers to cancel and repay their loans within 48 hours without any penalties.

“High-cost credit products, or ‘payday loan-like’ products, can be confusing for some consumers and lead people into a cycle of borrowing that’s hard to get out of,” said Justice Minister Heather Stefanson, in a statement. “This new legislation ensures there is transparency in the process and helps consumers make more informed decisions.”

The legislation further entails that payday loan firms will support the Manitoba Borrowers’ Financial Literacy Fund. They will put money into this program through their licensing fees. The initiative is aimed at educating borrowers and potential borrowers about payday loans and the industry overall.

The New Democratic Party (NDP) government was the first to introduce such legislation in 2013. Ron Lemieux, the minister who was in charge of consumer protection at the time, wanted to amend the Consumer Protection Act and assist consumers in getting credit and avoiding payday loans.

Many jurisdictions across Canada are either proposing or implementing new payday loan regulations. The province of British Columbia recently changed the maximum allowable charge on payday loans from $23 to $17, which makes it the second-lowest in Canada. Meanwhile, the Alberta government also altered the maximum allowable charge to $15, which is now the lowest amount in the Great White North.

This initiative to restrict payday loans is also taking place south of the border.

At all three levels of government, public officials and consumer advocacy groups have been pushing hard to either limit or even prohibit the payday loan industry from operating. The Consumer Financial Protection Bureau (CFPB) released a proposal this past summer that would install a regulatory framework at the federal level for the very first time in the nation’s history.

Proponents of payday loans say it offers impoverished consumers access to credit, especially when financial institutions turn down these same customers for conventional credit products. Opponents say that payday loans do more harm than good because it sends the most vulnerable into endless cycles of debt in which they are unable to pay back.

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Getting Hurt at Work Can Irreparably Damage Your Bank Account

accident

From adolescence to around the age of 65, most people in the US spend most of their time working. Assuming that an average person works around 40 hours per week during that time, he clocks about 90,400 hours, on average, during his work years. Considering the amount of time spent on the job, it is not at all surprising that a large number of mishaps happen at work.

According to the Occupational Safety and Health Administration, over 4,600 fatalities occurred on the job in 2014 and over three million people suffered serious injuries in the workplace. The figures represent multiple classifications, or workers with differing levels of medical coverage. News figures shows the workers are categorized as independent contractors, and full-time, part-time, temporary, and permanent employees.

While the Affordable Care Act has provided an increased access to health coverage, medical bills can still leave injured workers struggling financially. High deductibles, co-pays, co-insurance, lost wages, daycare costs, and travel to and from medial facilities show that the costs add up very quickly.

One actuarial firm published a medical index for the previous 15 years. Known as the Millman Medical Index, or MMI, the index calculates the median healthcare cost for a household of four. The statistics show that the amount spent for healthcare has more than tripled since 2001 (at that time, it was approximately $8,400), and now is tallied at around $25,800.

The increase surpasses the growth of the consumer price index (CPI) for healthcare services as well as the 2% calculated increase in median income from 2004 to 2014. Compared to employers, employees currently bear a large part of the burden for the majority of medical expenses. Reports show consumers pay around 43%, an increase from 39% during the 15-year period.

As a result, it is not difficult to see how getting injured at work can also injure someone’s financial standing. Over the past 10 years, the median amount middle-income households spent for medical care increased by just over 50%, which is almost double the growth in salaries (30%), and three times the rate of growth for services and products.

In turn, unpaid medical bills are currently the major reason for bankruptcy filings. Calculated at 62%, the costs surpass mortgage and credit card debt. Job loss is another reason that debts are left unpaid. Losing a job also means the loss of health insurance.

Therefore, financial professionals warn workers to protect themselves if they receive an illness or injury on the job site. Whether the condition is an acute traumatic type injury (such as falling from a ladder) or one that is a cumulative-trauma type condition (like carpal-tunnel syndrome), you need to take the following steps:

  • Report the injury to whoever is in charge. Be clear about what occurred and that it happened on the job. Report the injury even if you do not believe it is serious. The back you strain may not need to be treated for a few days. If you don’t report an injury then, the employer could claim you were not injured on the job.
  • Maintain good records. Organization and showing proof can make the difference between losing financial reimbursement and winning an employment claim. You need to make sure all medical reports, insurance documentation, and incident reports are completely filled out. Make sure all the paperwork is fully completed and all the related expenses are thoroughly recorded.
  • Consider contacting a lawyer. Workplace injury cases can be complex as they involve physicians, independent consultants, physical therapists, insurance company attorneys, and adjusters. Talk to an attorney to evaluate your case. The first consultation is usually free.

Workplace injuries can originate from a broad range of causes. Most injuries happen from bending, climbing, and reaching. They also result from being caught between objects, repetitive motions, falling from heights, overexertion, falling objects, slip-and-fall accidents, and vehicle mishaps. Keeping a work area free of clutter and keeping a steady pace during the day are two ways to avoid or prevent an injury.

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