Jawbone Co-Founder's Health Startup Sued by Investor Alleging Fraud

All.health, a medical care startup that rose from the ashes of once-hot wearable company Jawbone, is being sued in San Francisco by one of its investors for alleged fraud, misrepresentation and breach of contract. From a report: All.health's co-founders, the former Jawbone Chief Executive Officer Hosain Rahman and Michael Luna, are also named in the complaint. While All.health, Rahman and Luna deny the claims, the dispute is an illustration of the rancor that can envelop fledgling tech companies at a suddenly volatile time for startup funding. Jawbone was a Silicon Valley darling -- most famous for its wireless earpieces -- until the startup dramatically folded in 2017 and sold off its assets. As Jawbone was disintegrating, Rahman salvaged the company's medical device business. The resulting startup, now called All.health, developed wearable monitoring hardware and technology for people with chronic illnesses like diabetes.

In a complaint filed this summer, Polymath Holdings, a Dubai-based investment company and All.health backer, claimed that the startup overpromised, took millions of dollars and under-delivered on a commitment to manufacture thousands of health-monitoring devices. The suit, which was recently largely unredacted by a San Francisco court, alleges that the startup was a "classic 'fake-it-until-you-make it' tale of fraud."