Theranos and CEO Elizabeth Holmes being sued by investors

Investors are suing Theranos and its CEO Elizabeth Holmes claiming that she lied about its technology.

The lawsuit, filed in California, by two shareholders, sought class action status. According to the shareholders Holmes lied when she pitched the company's technology as being able to use a finger prick's worth of blood to test for diseases.

Robert Colman who bought Theranos shares in 2013, and Hilary Taubman-Dye, who acquired the shares in August 2015 have filed the suit in California.

Additionally, the company also faced a lawsuit from a major investor, patients, and a breach of contract lawsuit by Walgreens. Walgreens has sued for $140 million in damages, saying it was misled by Theranos about how far along its blood-testing technology was when the original partnership was struck.

Walgreens, which was Theranos' biggest partner at one time, terminated its relationship with the company in June. Walgreens had operated Theranos Wellness Centers, where people could have their blood tested in the company's stores.

The past year had seen the company face questions about the accuracy of its finger-prick blood tests. Also, a government agency had said that one of its labs posed "immediate jeopardy" to patients. Adding to its woes, CEO Holmes was banned from the lab-testing industry for two years, and partnerships like the one with Walgreens fell through.

"The once-vaunted company is in disarray and the value of its securities are in a free-fall," according to the complaint.

Colman, the co-founder of the former Silicon Valley heavyweight Robertson Stephens investment firm, claimed to be unaware of the ''material omissions'' that led to the decline.

Colman had bought his stake through an investment in a Lucas Venture Group fund, a venture capital fund, while 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 raised questions about the validity of the technology, but could not.