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Feds target Theranos with criminal investigation, reports say

Federal prosecutors from the U.S. Attorney's office and the SEC are investigating blood-testing start-up Theranos over whether it misled investors, sources told The Wall Street Journal Monday.

Clients like Walgreens were subpoenaed about how Theranos described its technologies and progress to investors and government officials, the Journal reported. These early subpoenas do not indicate that prosecutors are actively seeking indictment, the Journal reported, though misleading government officials is a crime.

"The company continues to work closely with regulators and is cooperating fully with all investigations," Theranos spokeswoman Brooke Buchanan told CNBC.


Theranos is known for its "revolutionary" fast, accurate and affordable blood testing using less-invasive needles and tubes. But the embattled biotechnology company has been the subject of scrutiny after media reports raised questions about the accuracy of its proprietary tests. Theranos also faced allegations that most of its tests are performed with traditional lab machines, prompting potential sanctions against the company's CEO, Elizabeth Holmes.

Theranos has stepped up recruitment of an advisory board of scientific and medical experts.

"We've stopped testing and we've taken the approach of saying 'let's rebuild this entire laboratory from scratch so that we can ensure it never happens again,'" Holmes told NBC's "TODAY" show Monday. "I feel devastated that we did not catch and fix these issues faster."

The Justice Department declined to comment to CNBC. The SEC did not immediately respond to a request for comment.

For the full report, see The Wall Street Journal story here.

— CNBC's Eamon Javers contributed to this report.