Building a health-technology startup on nothing but hot air may be easier than you’d think — at least, according to a federal indictment unsealed Monday and related civil charges brought by the Securities and Exchange Commission.
Federal prosecutors charge that executives at Outcome Health, a high-flying startup, are guilty of defrauding their clients, lenders, and investors, leading to nearly $1 billion in fraudulently obtained investments and debt. The SEC made its own complaint, alleging that Outcome raised $487 million by falsely portraying itself as a success to its investors, which included Goldman Sachs, Google-affiliated CapitalG, and the Pritzker Group.
Outcome was founded in 2006 as Context Media by two Chicago entrepreneurs: Rishi Shah, now 33, and Shradha Agarwal, 34. According to the SEC, Shah owned 80% of the startup and Agarwal the other 20%.
This article is exclusive to STAT+ subscribers
Unlock this article — plus daily market-moving biopharma analysis — by subscribing to STAT+.
Already have an account? Log in
Already have an account? Log in
About the Author Reprints
To submit a correction request, please visit our Contact Us page.
STAT encourages you to share your voice. We welcome your commentary, criticism, and expertise on our subscriber-only platform, STAT+ Connect