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Theranos Investors on the Line

A number of high-profile investors might lose what they put into Theranos as the firm continues to grapple with fallout from its regulatory issues, the Wall Street Journal reports.

Individuals and families, including Rupert Murdoch and the Cox Enterprises family, invested heavily in the firm, which the Journal says help fuel the $632 million it raised during its latest funding round. It notes that Murdoch, the executive chairman of News Corp and 21st Century Fox, and Cox each invested about $100 million into Theranos. Riley Bechtel from the construction firm the Bechtel Group, also invested in the startup.

But now that Theranos is facing regulatory sanctions, criminal and civil investigations by the US attorney's office and the Securities and Exchange Commission, and is closing its labs to become a technology development company rather than a blood-testing firm, the Journal says the capital that flowed into the firm might be threatened.

Theranos's woes have also brought a number of lawsuits. Its former partner Walgreens is suing the firm for $140 million in damages and lawsuits from other investors are now being filed. In a separate article, the Journal reports that Robert Colman, a cofounder of the former venture capital firm Robertson Stephens & Co., is suing the Theranos for fraud. In the lawsuit, Colman alleges that Theranos made misleading claims about its technology and operations while wooing investors, according to the Journal.

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