“The Theranos story is an important lesson for Silicon Valley,” said Jina Choi, director of the SEC’s San Francisco regional office.

As the roll-out with “Pharmacy A” neared, according to the SEC, Holmes told the company’s engineers to modify standard blood-testing machines to run Theranos’s tests.

Around the same time, Holmes was using the company’s glowing profile in the media to raise more money.

According to the SEC’s complaint, Holmes and former president Ramesh “Sunny” Balwani knowingly made repeated false or misleading statements to investors about the company’s products, its business relationships, and its prospects for long-term growth.

The SEC said that the company gave investors binders full of background materials including a slide presentation, financial projections and clippings from favourable media reports in publications including The Wall Street Journal, Wired, and Fortune.

The company told investors that by 2015 it would bring in revenue of $US1 billion, the SEC said.

Balwani, the Theranos president, still faces an SEC lawsuit, which is pending in federal court in California.

Because the SEC case was resolved without admissions of wrongdoing, prosecutors couldn’t use it against Holmes and Balwani, Koenig said.

Steven Peikin, the co-director of the SEC’s enforcement division, said the company avoided paying any penalties in part because the misconduct was perpetrated by Holmes and Balwani.