Theranos and its founder just got hit with another lawsuit

• Mohammed Hadi and Lydia Ramsey

• 17h
• 15,536

Elizabeth Holmes, the founder and CEO of Theranos, at the Wall Street Journal Digital Live conference at the Montage hotel in Laguna Beach, California, in 2015. REUTERS/Mike Blake

Theranos and its CEO, Elizabeth Holmes, are being sued by investors who claim Holmes lied about the company's technology as the startup raised funds.

The lawsuit, filed in California, names two shareholders who are seeking class-action status. They include Robert Colman, a co-founder of Robertson Stephens, the San Francisco investment bank.

The lawsuit claims that Holmes knew the company's technology — advertised as being able to use a finger prick's worth of blood to test for diseases — didn't work when she pitched it.

Theranos declined to comment on the suit. The company is also facing a lawsuit from one of its major investors, lawsuits filed by patients, and a breach-of-contract lawsuit by Walgreens.

Walgreens is looking for $140 million in damages, claiming that Theranos misled it about how far along its blood-testing technology was when they struck a partnership. Walgreens, which had operated Theranos Wellness Centers where people could have their blood tested in some of its stores, terminated its relationship with the company in June.

In the past year, the company has faced questions about the accuracy of its finger-prick blood tests, been told by a government agency that one of its labs posed "immediate jeopardy" to patients, had Holmes get barred from the lab-testing industry for two years, and seen partnerships like the one with Walgreens fall through.

In October, Theranos shut down all of its lab operations, pivoting to focus solely on the company's miniLab technology. The pivot cut 340 positions and closed its Wellness Centers where blood tests were performed.

"The once-vaunted company is in disarray and the value of its securities are in a freefall," the newest suit claims, though it doesn't provide a current valuation on the shares.

The shareholders named in the lawsuit are Colman and Hilary Taubman-Dye.

Colman bought his stake through an investment in a Lucas Venture Group fund, a venture-capital fund. Taubman-Dye acquired her shares for $19 apiece on SharesPost, a market for private-company shares. She tried to back out of the purchase after The Wall Street Journal first raised questions about the validity of the technology in October of 2015.

The filing includes a table noting Theranos' share price through October 2015:The Theranos share price.Lawsuit filing

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China forex regulator tightens controls to stem capital outflows: sources

Chinese 100 yuan banknotes are seen in this picture illustration taken in Beijing July 11, 2013. REUTERS/Jason Lee/File Photo

China is stepping up measures to stem capital outflows after its yuan currency skidded to more than eight-year lows, sources said on Tuesday, taking aim at outbound investments that have soared to a record high.

The State Administration of Foreign Exchange (SAFE) has begun vetting transfers abroad worth $5 million or more and is increasing scrutiny of major outbound deals, even those with prior approval, sources with knowledge of the new rules told Reuters.

Capital outflows, both legal and illegal, have pressured the yuan CNY=CFXS. The Chinese currency has depreciated nearly 6 percent against a strong dollar this year and many traders are betting on further losses, raising the specter of more capital flight.

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The new rules would govern transfers abroad under the capital account for transactions such as portfolio or foreign direct investment, and could knock some momentum from China's overseas asset shopping spree, analysts say.

Chinese outbound investment deals totaled $530.9 billion in the first nine months of 2016, surpassing 2015's record volume and helping China outstrip the United States as the top acquirer for foreign companies, Thomson Reuters data show.

"The new rules will have a very big impact on outbound deals," said Luke Zhang, a partner at Zhong Lun Law Firm, who expects the number of deals to go down "quite a lot".

SAFE always supports legitimate and compliant overseas direct investments, the regulator said on its microblog late on Tuesday.

"Previously, only forex transfers worth $50 million or more needed to be reported to SAFE. Now, the threshold has been drastically lowered to $5 million, and covers both foreign currency and yuan," said one of the sources with direct knowledge of the rules.

"All we can do is to ask clients to be patient, and tell them that the transaction is being vetted by SAFE for authenticity and may not be approved."

One of the sources said that even if an outbound investment had already obtained approval to buy foreign exchange, but the money had not been fully transferred, the remainder of the quota was now subject to further approval if it exceeds $50 million, which is regarded as a "large sum".

Two other sources confirmed the new rules.

The sources said the forex regulator told banks about the new rules on Monday, the same day the government said it would stick to its "going out" strategy of encouraging outbound investment.

DEFENDING THE YUAN

China has been using its foreign currency reserves to keep the yuan from falling too rapidly against the dollar, managing market expectations, and restricting outflows into overseas securities.

Wang Zhenying, a senior Chinese central bank researcher, said in a recent interview that Beijing needed to stem outflows that risk putting the yuan into a potentially destructive feedback loop.

"At the moment, the fall in the yuan's exchange rate is shaping market expectations. Depreciation triggers capital flight, and capital flight exerts even bigger pressure on the yuan," Wang said.

"Therefore, it's necessary to break this feedback loop... for example, by slowing capital outflows," he said.

Chinese state-owned banks were seen selling dollars in the onshore foreign exchange market for a second straight day on Tuesday, in what traders called a bid to support the yuan.

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The yuan has rebounded around 0.5 percent in the past few sessions. [CNY/]

While still the largest in the world, China's foreign currency reserves CNFXM=ECI have fallen to $3.17 trillion at the end of September from a $3.99 trillion peak in June 2014, indicating that authorities sold dollars to prop up the yuan's value.

Selling of the yuan and other emerging market currencies has intensified since Donald Trump's upset presidential victory on Nov. 8. Expectations of higher fiscal spending and interest rates under a Trump administration have boosted U.S. bond yields and the lure of the dollar.

The new curbs, if adopted, are likely to have an impact on deals, said Greg Burch, who works on mid-market China outbound M&A deals as a Hong Kong-based partner at the Locke Lord law firm.

Stronger capital controls could also affect China's push to internationalize the yuan and would raise questions about where capital will flow internally, as property prices are already high, Burch added.

"If you pinch a balloon in one place, it just bulges in another."

(Reporting by Samuel Shen and John Ruwitch in SHANGHAI and Carol Zhong at Basis Point in HONG KONG and Elias Glenn in BEIJING; Editing by Ryan Woo and Clarence Fernandez)

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The World Chess Championship is tied as Magnus Carlsen and Sergey Karjakin prepare for final game

• Matthew DeBord
 
•   

• 24h
• 15,091

All tied, with one game to play. Maria Emelianova

NEW YORK — The 2016 World Chess Championship between title-holder Magnus Carlsen of Norway and Sergey Karjakin of Russia was shaping up to be a tense festival of long games that ended up as draws — until last week, when in Game 8 Carlsen overpressed with the white pieces and went down to defeat.

In Game 9, Carlsen needed a draw with black to stop the bleeding, but Karjakin conjured his best game, with a bishop sacrifice after a 20-minute deep think that recalled Bobby Fischer at his peak and sent a shock wave through the elite chess world. 

Would Carlsen, the two-time defending World Champion, the "Mozart of chess," go down two full points to the Russian challenger — a nearly insurmountable deficit in a 12-game match?

As it turned out, Karjakin's bold play looked more impressive than it actually was, once the lines were crunched by computer analysis. Carlsen, whose accuracy during this match has been questioned, found the right defensive combinations under serious time pressure and was able to draw the game. It was an epic save.

In Game 9, Karjakin thought for 20 minutes about the move Bxf7, a piece sacrifice that opens an attack on the black king. Some thought that Qb3 was better. Agon

The final Game 9 position — and epic save from Carlsen. Agon

That set the stage for Game 10, with Carlsen wielding the white pieces. Needing the full point to tie, he used the Ruy Lopez opening, and Karjakin countered with the infamously drawish Berlin Defense. 

But a draw wasn't in the offing. Karjakin finally showed some cracks, missing a few crucial, subtle calculations that enabled Carlsen to achieve a modest advantage, converting it to a win by the 75th move.

On Saturday, Game 11 also ended in a draw, but there were some tense moments for Karjakin. Carlsen, by contrast, appeared newly relaxed and seemed comfortable to push past an obvious draw to put some stress on Karjakin in the Russian's final game with white.

The match is now tied 5.5-5.5, with a single games remaining. Game 12 takes place on Monday in lower Manhattan, at 2PM ET. Carlsen will have white, and the obvious question is: "Will he take a chance and try to defend his title? Or will he play it safe?"

If the score is deadlocked after the 12 classical games are all in the books, the players will go to tiebreaks: four "rapid" games, with each player having 25 minutes on his clock, with a ten-second time increment added for each move. If this match is still after that, 5-minute "blitz" games will decide the outcome.

Thus far, Karjakin's bishop sac has been the most exciting moment in a WCC match that hasn't been much of a spectacle for opening theory or bold, attacking play. Fischer himself would have appreciated the bishop blowing open the defense of the back king on the f7 square — a weakness that the last American World Champion often targeted.

Endgame enthusiasts have enjoyed a treat, however, as the players have ground out numerous exhausting games that went beyond 40 moves. Will Game 12 be another equal result? We have only one more day to wait to find out.

SEE ALSO: Lightning strikes at the World Chess Championship as Magnus Carlsen loses Game 8

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OPEC is making a last-ditch bid to save the oil deal the markets want

• Rania El Gamal and Alex Lawler, Reuters

• 6h
• 9,368

Mohammed Barkindo, left, the secretary-general of OPEC, with Venezuelan President Nicolas Maduro after their meeting at Miraflores Palace in Caracas, Venezuela, on November 16.REUTERS/Carlos Garcia Rawlins

VIENNA — OPEC was trying on Monday to rescue a deal to limit oil output as tensions grew among the producer group and the non-OPEC member Russia, with the top exporter Saudi Arabia saying markets would rebalance even without an agreement.

OPEC experts started a meeting in Vienna at 9 a.m. GMT (4 a.m. ET) and were due to make recommendations to their ministers on how exactly the Organization of the Petroleum Exporting Countries should reduce production when it meets on Wednesday.

The Algerian and Venezuelan oil ministers were to travel to Moscow on Monday and Tuesday in a final attempt to persuade Russia to take part in cuts instead of merely freezing output, which has reached new highs in the past year.

In September, OPEC, which accounts for a third of global oil production, agreed to cap output at about 32.5 million to 33 million barrels a day versus the current 33.64 million to prop up oil prices, which have more than halved since mid-2014.

The meeting this Wednesday was expected to rubber-stamp that deal, with Russia and some other non-OPEC producers such as Azerbaijan and Kazakhstan also contributing.

But doubts emerged in recent weeks as OPEC's Nos. 2 and 3 producers, Iraq and Iran, expressed reservations about the mechanics of output reductions and Saudi Arabia voiced concern about Russia's willingness to cut.

On Friday, OPEC canceled an experts meeting with non-OPEC producers scheduled for Monday after Saudi Arabia said the organization needed to sort out its differences first.

Over the weekend, the Saudi energy minister, Khalid al-Falih, said oil markets would rebalance even without an output-limiting pact. That contrasted with his previous statements, in which he had said Riyadh was keen for a deal.

Mohammed bin Saleh al-Sada of Qatar, left, the president of OPEC, with Barkindo during a news conference after an informal meeting between members of the organization in Algiers, Algeria, on September 28. REUTERS/Ramzi Boudina

'Nobody knows'

Doubts about OPEC's ability to deliver promised cuts sent Brent crude down by 2% initially on Monday to less than $47 a barrel, though prices later recovered.

Some analysts including Morgan Stanley and Macquarie have said oil prices will correct sharply if OPEC fails to reach a deal, potentially going as low as $35 a barrel.

As OPEC experts turned up at the group's headquarters on Monday, one delegate who had previously said a deal would be done said this time: "I am not sure."

Another delegate, when asked about the prospects for a deal, said: "Nobody knows yet."

OPEC ministers started arriving in Vienna on Sunday for the group's regular twice-yearly talks, but Saudi Arabia's Falih was not expected to land before Tuesday evening, leaving little time for traditional premeeting discussions with peers.

The Iranian semiofficial news agency Mehr published an editorial on Sunday accusing Saudi Arabia of declaring a new "war on oil prices" and reneging on its promises to limit output.

The tone contrasted with Iranian news agencies' more upbeat coverage of OPEC's informal meeting in September in Algeria, when the initial deal was reached.

(Additional reporting by Ahmad Ghaddar and Vladimir Soldatkin; Writing by Dmitry Zhdannikov; Editing by Dale Hudson)

Read the original article on Reuters. Copyright 2016. Follow Reuters on Twitter.

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It's now between Fillon and Le Pen for the French presidency

• Adam Payne and Reuters

• 20h
• 10,140

Francois Fillon. Thomas Samson/Reuters

François Fillon will stand for the French conservatives in the presidential election after claiming victory over Alain Juppe in the Republican primary on Sunday.

Partial results based on four-fifths of the primaries' polling stations showed Fillon winning by a huge margin of nearly 40 percentage points.

Fillon is set to go head-to-head with Marine Le Pen of the far-right National Front party in May's election, meaning the French left wing is set to be excluded from the contest altogether after five years of socialist Francois Hollande in power.

Fillon, a socially conservative free-market advocate who has been described as France's answer to former UK Prime Minister Margaret Thatcher, had won over 67% of the vote in a one-on-one battle with Juppe, who trailed with about 32%.

The former prime minister pledged to unite the Republicans in a victory speech he delivered Sunday evening. "I must now convince the whole country our project is the only one that can lift us up," a visibly moved Fillon said at his campaign headquarters after Juppe conceded defeat.

"My approach has been understood: France can't bear its decline," he added. "It wants truth and it wants action. I will take up an unusual challenge for France: tell the truth and completely change its software."

Marine Le Pen. BBC

A representative for the National Front said the party welcomed Fillon's victory as it represented a "great" opportunity for Marine Le Pen to take control of the party's highest office. Fillon has vowed to implement a range of tough economic policies, such as slashing public spending, raising the retirement age, scrapping the 35-hour working week, and cutting back social security.

"His project is so sharply different from ours, and it is such a harsh one, he cannot get a majority of voters to back him," the National Front's Florian Philippot told Reuters. "For us, he's a great candidate (to face in the election)."

Speaking in an interview last week, Philippot described Fillon's manifesto as a "programme of chaos." He said: "It's impossible that this austerity cure does not trigger chaos."

Opinion polls have for months forecast that the center-right candidate and Le Pen would qualify for the second round of the presidential election in May and that Le Pen would then lose.

But polls, which had until just days before his victory failed to forecast Fillon's comeback, are taken with an increasingly big pinch of salt, especially after shocking results elsewhere in the west like Brexit and Donald Trump's victory in the US presidential election.

All eyes now turn to the ruling Socialist party and to whether the deeply unpopular Hollande will decide to run for the left-wing ticket in his party's primaries in January, amid signs his prime minister, Manuel Valls, is considering a bid of his own.

France, the eurozone's second-largest economy, has faced stubbornly high unemployment under Hollande, and the past two years of his term have been marked by Islamist militant attacks that have killed 230 people and focused attention on immigration and security concerns.

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