One of Theranos Inc.’s biggest financial backers has sued the embattled startup and its founder for allegedly lying to attract its nearly $100 million investment, according to a fund document and people familiar with the matter. 
 
 Partner Fund Management LP, a San Francisco-based hedge fund, filed the suit in Delaware Court of Chancery Monday afternoon, a letter to the hedge-fund’s investors says. 
 
 “Through... ||||| A San Francisco hedge fund has filed a civil suit against the company over its investment. The suit is without merit, the assertions are baseless, and the plaintiff is engaging in revisionist history. 
 
 Most of the company statements the plaintiff has cited in its suit were made after the time the plaintiff invested, and could not possibly have been the original basis for investment. This wholesale reliance on post-investment statements, therefore, negates the claim that the plaintiff was misled. ||||| Until now, there has been one big reason to believe that Theranos, the controversial diagnostics startup, could survive despite widespread doubts about whether its technology, which the company once promised would revolutionize the blood testing business, even works: its investors, after putting $700 million into the startup, seemed solidly behind Theranos and its founder, Elizabeth Holmes. 
 
 Not any more. Partner Fund Management, a San Francisco-based hedge fund with $4 billion under management, filed a lawsuit alleging that it invested in Theranos based on misleading statements made by Holmes and Theranos. Two years ago, investors valued Theranos at $9 billion, and as a result FORBES once ranked Homes as the richest self-made women in the world. In June, we cut our estimate of her net worth to zero because doubts about Theranos' proprietary technology had just become too big to ignore. 
 
 "The suit, filed by a hedge fund, is without merit and Theranos will fight it vigorously," a Theranos spokesman said. "The hedge fund is engaging in revisionist history, making claims that are not rooted in facts. The company remains committed to its mission and is appreciative of its strong investor base that understands and continues to support those efforts." 
 
 Partner Fund Management's suit creates more headaches for Theranos, which last week announced it would exit the business of running blood testing centers and try to get new medical devices approved by the Food and Drug Administration instead. For one thing, the hedge fund's allegations will create more negative headlines. The suit could also lead to other investors trying to recoup funds, something Theranos can ill afford as it tries to pivot. Worse, the allegation that Theranos lied to investors could draw further scrutiny from government investigators. Lying to investors can be against the law. 
 
 The suit, which was first reported by the Wall Street Journal, is detailed in a letter sent by the fund to its investors, a copy of which was obtained by FORBES. The letter states: "Among other things, Theranos and its principals knowingly and repeatedly lied that they had developed proprietary technologies that worked, were on the cusp of receiving all necessary regulatory clearances and approvals, and concealed the truth about the commercial viability of their technologies and methods." 
 
 The letter says the fund "meticulously" documented its due diligence of Theranos, including interactions with Holmes herself and with her former chief operating officer, Sunny Balwani. "This documentation substantiates the myriad deceptions, falsehoods, and fraudulent conduct by Theranos, Holmes, and Balwani in connection with PFM’s investment," its says. Right now, the complaint itself is confidential, because it is filed in a Delaware court designed to protect the interests of companies. But Partner Fund Management (it calls itself PFM) says it wants to make its complaint public. "PFM believes that the entire complaint belongs in the public domain and will oppose any effort by the defendants to extend their obsession with secrecy to this lawsuit," the letter says. ||||| Gilbert Carrasquillo/Getty Images 
 
 Blood-testing company Theranos is being accused of deceiving a major investor to attract its nearly $100 million investment. 
 
 The charges were leveled against the embattled company in a lawsuit filed Monday by hedge fund Partner Fund Management in Delaware Court of Chancery, according to a letter to investors seen by the Wall Street Journal. 
 
 "Through a series of lies, material misstatements, and omissions, the defendants engaged in securities fraud and other violations by fraudulently inducing PFM to invest and maintain its investment in the company," the letter said, according to the newspaper. 
 
 The Palo Alto, California-based company dismissed the lawsuit as baseless, accusing Partner Fund Management of "engaging in revisionist history. 
 
 "Most of the company statements the plaintiff has cited in its suit were made after the time the plaintiff invested, and could not possibly have been the original basis for investment," Theranos said in an unsigned blog post. "This wholesale reliance on post-investment statements, therefore, negates the claim that the plaintiff was misled." 
 
 It's the latest twist in a downward spiral of a once-promising company that set out to innovate blood testing. Two years ago, it was valued at $9 billion. But it has faced increased scrutiny, along with civil and criminal investigations, since a Wall Street Journal report in October 2015 suggested Theranos' blood-testing devices were flawed. 
 
 In July, the CMMS revoked the company's Clinical Laboratory Improvement Amendments certificate, an action that prohibits Holmes from operating a lab for two years. Less than a week ago, Holmes announced plans to shut down all its clinical labs and Theranos Wellness Centers, closures that will result in 340 employees being laid off.
– Just when you thought things couldn't get worse for Theranos, this: One of its major investors has sued the company and its founder, Elizabeth Holmes, in an effort to get back its $96 million investment and then some. Partner Fund Management argues "the defendants engaged in securities fraud and other violations by fraudulently inducing PFM to invest and maintain its investment in the company," per the Wall Street Journal. More specifically, Theranos—which said it could conduct blood tests using a single drop—"knowingly and repeatedly lied that they had developed proprietary technologies that worked" and misled investors about its quest for FDA approval and its partnership with Walgreens, the hedge fund says, per Forbes. A Theranos rep, however, says the suit filed at the Delaware Court of Chancery on Monday "is without merit and Theranos will fight it vigorously." "Most of the company statements the plaintiff has cited in its suit were made after the time the plaintiff invested, and could not possibly have been the original basis for investment," Theranos adds in a blog post, per CNET. "This wholesale reliance on post-investment statements, therefore, negates the claim that the plaintiff was misled." The suit is just the latest hurdle for Theranos. As Holmes has been banned from running labs for two years, the company recently announced it would close its labs and lay off 340 workers to focus on commercializing mini blood-testing labs.