PALO ALTO (KCBS) – Lab services company Theranos is being sued by one of its biggest financial backers on a claim the startup and its founder lied to attract a nearly $100 million investment.

The Wall Street Journal reported that San Francisco-based Partner Fund Management LP is accusing Theranos founder and CEO Elizabeth Holmes of deceiving the hedge fund. with its claim it had developed “proprietary technologies that worked,” and was close to getting regulatory approvals.

A Theranos spokesman told the Journal the suit is without merit.

The lawsuit comes a week after Theranos closed its clinical labs and wellness centers in California, Arizona and Pennsylvania and laid off 340 employees.

Based in Palo Alto, Theranos is already under criminal investigation for its blood testing device.