Today the Securities and Exchange Commission has charged Theranos CEO and founder Elizabeth Holmes, along with the company’s former President Sunny Balwani with fraud: Raising more than $700 millions from investors via an “elaborate, years-long fraud in which they exaggerated or made false statements about the company’s technology, business, and financial performance.” Holmes has settled the charges against her and has agreed to relinquish voting control over Theranos, along with a reduction of her equity stake in the company. She must pay a $500,00 penalty and is barred from serving as an officer or director of a public company for 10 years. She must also return the remaining 18.9 million shares she obtained during the fraud scheme.

“The Theranos story is an important lesson for Silicon Valley. 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.” –Jina Choi, Director of SEC’s San Francisco Regional Office

The complaints against Holmes, Balwani and Theranos are numerous: Making false and misleading statements about its portable blood analyzer in investor presentations, product demonstrations and media articles. Theranos claimed it could conduct comprehensive blood tests from just drops of blood, while the company’s analyzer could only complete a small number of tests. In fact, “the company conducted the vast majority of patient tests on modified and industry-standard commercial analyzers manufactured by others,” according to an SEC statement.

In addition, the SEC complaint states that Theranos, Holmes and Balwani made false claims about how the company’s products were used by the U.S. Department of Defense on the ground in Afghanistan and on medevac helicopters, generating more than $100 million in revenue in 2014. “In truth, Theranos’ technology was never deployed by the U.S. Department of Defense and generated a little more than $100,000 in revenue from operations in 2014,” the SEC stated.

“Investors are entitled to nothing less than complete truth and candor from companies and their executives. The charges against Theranos, Holmes, and Balwani make clear that there is no exemption from the anti-fraud provisions of the federal securities laws simply because a company is non-public, development-stage, or the subject of exuberant media attention.” – Steven Peikin, SEC’s Enforcement Division

Although Theranos and Holmes settled the claims, they did not admit guilt, nor did they deny the allegations.