Outcome Health

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Outcome Health is a Chicago-based healthcare technology company founded by Rishi Shah. Its registered name is ContextMedia Health LLC. [1] It is majority owned by Littlejohn & Co., a private equity firm. [2] Its founders were indicted and convicted by a federal grand jury on multiple charges of fraud and also sued by the SEC, with veteran tech investor Howard A. Tullman describing Outcome as "our version of Theranos." [3]

Contents

History

In May 2017, a funding round with Goldman Sachs, CapitalG, Pritzker Group, and others invested $600 million in Outcome Health, giving it a $5.6 billion valuation. [4] This is the largest single funding round in Chicago since Groupon in 2011, when it raised $950 million in its fifth funding round. [5]

According to a report in The Wall Street Journal unnamed former employees and advertisers accused the company of overcharging their customers for advertisements and misquoting third-party analyses and falsifying documents on the ads' performance. According to the accusations, Outcome Health reported that the ads appeared on more video screens than they had installed. [1] [6] Lanny Davis, a company spokesperson, responded by saying a law firm had been hired to "review allegations about certain employees' conduct that have been raised internally." [1]

In November 2017, CEO Vivek Kundra left the company. [7] Also in November, several advertisers stopped working with Outcome Health and investors sued the company claiming fraud and breach of contract. [8] [9]

As of January 2018, Outcome Health decided to settle outstanding investor lawsuits in exchange for having Shah and Agarwal step down. [10]

In June 2018, Matt McNally, former chief media officer at Publicis Health, was announced as the company's new CEO. [11]

On November 25, 2019, four former executives were indicted [12] for falsifying ad performance statements to secure bank loans of nearly $1 Billion. Former CEO Rishi Shah, former President Shradha Agarwal, and former CFO Brad Purdy were charged with several counts of mail, wire and bank fraud, money laundering. [13] On April 11, 2023, Shah, Agarwal, and Purdy were found guilty of multiple counts and await sentencing, facing up to 30 years in prison. [14] [ needs update ]

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References

  1. 1 2 3 Winkler, Rolfe (October 12, 2017). "Outcome, a Hot Tech Startup, Misled Advertisers With Manipulated Information, Sources Say". The Wall Street Journal . Retrieved 13 October 2017.
  2. ↑ Company press release
  3. ↑ John Pletz, Crain's Chicago Business, December 2, 2019
  4. ↑ Konrad, Alex. "This 31-Year-Old Is Worth $3B For Bringing Drug Marketing Into Your Doctor's Office". Forbes. Retrieved 27 August 2017.
  5. ↑ "Chicago's newest billionaire, 31-year-old Rishi Shah, is self-made". Chicago Sun-Times. Retrieved 27 August 2017.
  6. ↑ Lynley, Matthew. "Startups advertising In-office medical advertising startup Outcome Health reportedly misled advertisers". Tech Crunch. Retrieved 13 October 2017.
  7. ↑ Winkler, Rolfe (2017-11-04). "Outcome Health Loses Operating Chief Vivek Kundra". Wall Street Journal. ISSN   0099-9660 . Retrieved 2020-09-24.
  8. ↑ Winkler, Rolfe; Vranica, Suzanne (2017-11-05). "Drug Advertisers Suspend Deals With Outcome Health". Wall Street Journal. ISSN   0099-9660 . Retrieved 2020-09-24.
  9. ↑ Winkler, Rolfe (2017-11-08). "Investors Sue Ad Startup Outcome Health for Alleged Fraud". Wall Street Journal. ISSN   0099-9660 . Retrieved 2020-09-24.
  10. ↑ Marotti, Ally. "'Uphill battle' predicted for Outcome Health after settlement with investors". chicagotribune.com. Retrieved 20 February 2018.
  11. ↑ Marotti, Ally. "Outcome Health names advertising executive as new CEO". chicagotribune.com. Retrieved 2018-09-20.
  12. ↑ "4 health company executives accused in $1B fraud scheme". ABC News. Retrieved 2019-11-26.
  13. ↑ Sandler, Rachel. "Former Outcome Health Executives Indicted In Billion-Dollar Fraud Scheme". Forbes. Retrieved 2020-08-28.
  14. ↑ "Former Executives of Outcome Health Convicted in $1B Corporate Fraud Scheme". www.justice.gov. 2023-04-11. Retrieved 2023-04-12.

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