On Monday, after weathering months of accusations that she had lied to get money for her blood testing start-up, Theranos, Elizabeth Holmes, the embattled entrepreneur who is on trial for fraud, sharpened her defense.
In her second day of testimony, which lasted just under two hours, Ms. Holmes’s lawyers showed exhibits and asked her questions to push back against the prosecution’s claims that she defrauded investors, patients and doctors.
The idea, as laid out by Ms. Holmes’s lawyers in the trial’s opening statements, was to show that a kernel of truth may have existed beneath some of the most blatant misrepresentations that prosecutors have shown Ms. Holmes making.
Here were the main rebuttals:
Theranos worked with pharmaceutical companies
One of the key allegations prosecutors have made against Ms. Holmes is that she claimed Theranos’s technology had been “comprehensively validated” by 10 of the world’s 15 largest pharmaceutical companies.
That was not true, prosecutors have said. Yet Theranos sent reports displaying those companies’ logos to investors, who testified that the reports lent the young start-up credibility and helped convince them to invest.
On Monday, Ms. Holmes painted a different picture. Theranos did work with pharmaceutical companies, she testified. There were clinical studies and even a study published in a peer-reviewed journal. (Ms. Holmes’s lawyer did not name which one.)
The questioning allowed Ms. Holmes to focus on Theranos’s early successes and the conversations she had with potential partners while glossing over the outcomes of those conversations. Ms. Holmes stopped short of addressing her later claims about Theranos’s successes and about the reports, which seemed to give Theranos stamps of approval from pharmaceutical companies.
During her testimony, Ms. Holmes also attempted to deflect blame. She said she learned about Theranos’s technology from the scientists and doctors who worked in the company’s lab. She added that she believed them when they said the technology worked. The implication: Ms. Holmes could not have intended to deceive investors if she believed the technology was real.
“We thought this was a really big idea,” Ms. Holmes said.
Ms. Holmes has been charged with 11 counts of fraud and conspiracy to commit fraud. She has pleaded not guilty. If convicted, she faces up to 20 years in prison.
The jury filed out, but the lawyers continued to argue about what exhibits can be admitted. Robert Leach, a lawyer for the prosecution, said they were not given enough time to review the exhibits from the defense. Kevin Downey, Ms. Holmes’s lawyer, countered that this was more time than the defense was given.
Testimony will begin at 9 a.m. tomorrow and stretch until 4 p.m.
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As the jurors filed out, Ms. Holmes attempted to make eye contact with each of them. Few looked up.
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Ms. Holmes’s legal team showed another email of Theranos’s scientists and lab workers telling Ms. Holmes about what Theranos’s technology could do. She testified that her understanding of the company’s technology was based on what those experts told her — a key part of the defense argument that Ms. Holmes could not have intended to deceive investors because she believed the tech worked.
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That’s it for today. The nearly two-hour delay has not been explained! Back in court tomorrow morning
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Ms. Holmes testified about her interactions with Shane Weber, a Pfizer director who evaluated Theranos’s technology and testified earlier in the trial. He concluded that the company’s answers to his technical due diligence questions were “non-informative, tangential, deflective or evasive” and that Pfizer should not work with the company.
Despite Mr. Weber’s conclusion, Theranos used reports with Pfizer’s logo on them to solicit investment.
Ms. Holmes testified that Theranos continued to “talk” and also “interact” with Pfizer after Ms. Weber’s conclusions, including discussions about potential partnerships. She did not say whether any of those talks or interactions led to business deals.
Ms. Holmes testified about a “great call” a Theranos employee had with Constance Cullen, an immunology expert from the pharmaceutical company Schering-Plough.
“All in all, it was awesome, I think,” a Theranos employee wrote to Ms. Holmes in a 2010 email that was displayed in the courtroom. “Calling her every single morning for the last 3 weeks finally paid off…”
Ms. Cullen testified earlier in the trial. Her characterization of her conversations with Ms. Holmes: “There were what I’d describe as cagey responses or attempts to redirect to other topics of discussion.” Ms. Holmes had pitched Ms. Cullen on Theranos’s technology, but Ms. Cullen said in her testimony that she was dissatisfied with Ms. Holmes’s responses. “There was insufficient technical detail for us to be able to evaluate the technology,” Ms. Cullen said.
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Mr. Downey asked Ms. Holmes about the results of Theranos’s work with GlaxoSmithKline. “I remember they thought our system eliminated the need for a lab,” Ms. Holmes said. The company continued to use Theranos machines in connection with clinical studies going forward, she testified.
For most of the first two months of Elizabeth Holmes’s trial, the mood inside the courtroom has been calm and quiet. Edward Davila, the mild-mannered judge overseeing the trial, has kept proceedings orderly throughout many hours of detailed testimony about Theranos’s inner workings and business dealings.
Each day, a small group of reporters and curious spectators wait in line to have their bags scanned by security before entering the beige, windowless courtroom. Inside, Ms. Holmes sits upright in a leather chair at a table with her lawyers, staring straight ahead.
Behind her in the gallery, her mother, Noel, typically sits in a reserved row with a rotating group of family and friends who have come in a show of support. Ms. Holmes’s partner, Billy Evans, is sometimes among them.
Attendees are assigned tickets for a limited number of seats, spaced out as a pandemic precaution. Everyone in the courtroom wears a mask except those testifying.
Reporters type carefully on laptops, wary of warnings from the judge that they must have a “silent keyboard.” One juror has complained that clacking noise from keyboards was distracting.
Regular attendees bring seat cushions for the hard wood benches — and to save their seats during breaks. When exhibits are displayed on two large monitors on the sides of the room, those paying attention squint and lean in to read. One reporter uses binoculars.
Ms. Holmes’s testimony on Friday afternoon sent a jolt of adrenaline through the sleepy room. Jurors listened intently. Reporters sent panicked messages to their editors. And the more dedicated spectators who hadn’t yet trickled out for the weekend sat up straight, craning to see Ms. Holmes plead her case.
On Monday, the courtroom was packed as Ms. Holmes testified for a second day and her defense began taking shape.
The break is over and court is in session. Ms. Holmes is back on the stand.
On Monday, Elizabeth Holmes, the founder of the blood testing start-up Theranos, aimed to rebut a key argument made by prosecutors in her fraud case: that she lied about her company’s work with pharmaceutical companies.
One of the most damning pieces of evidence prosecutors have presented against Ms. Holmes is that Theranos sent falsified pharmaceutical company validation reports to investors. Those reports displayed the logos of drug makers, which acted as proof that Theranos’s technology had been validated by them. During the trial, investors have testified that those reports helped persuade them to pour money into Ms. Holmes’s start-up.
But representatives from Pfizer and Schering-Plough testified that their companies had never validated Theranos’s technology. (Pfizer’s representative said the company had come to the opposite conclusion.) Nor had they approved of having their logos added to the reports.
On the stand on Monday, Ms. Holmes testified about studies that Theranos did with Merck, AstraZeneca, Centocor, Bristol Myers Squibb and others in 2008 and 2009. One exhibit displayed internal documentation about the success of some of this early work and showed a map of around a dozen cities around the world where Theranos’s machines were used for studies.
Kevin Downey, Ms. Holmes’s lawyer, also showed what he called a peer-reviewed journal that published the results of a study that Theranos did with Stanford University around this time. He did not mention the name of the journal.
In each example, Ms. Holmes’s understanding of Theranos’s technology was that “it performed well,” she testified. In some of the examples, Theranos was paid for its work in the studies.
Throughout her trial, Ms. Holmes’s defense team has tried making the case that there was some truth to what Ms. Holmes told investors.
“The reality of what happened at Theranos is far, far more complicated than what you have heard about Elizabeth Holmes so far,” Lance Wade, another of Ms. Holmes’s lawyers, said in his opening statement at the trial’s start in September.
The trial of Elizabeth Holmes has everything: a charismatic, attractive and youthful female defendant; celebrities; sex; vast sums of money; the long shadow of Steve Jobs; lives of real people at risk.
If it’s one of the most famous criminal cases ever to come out of Silicon Valley, it also sometimes seems like the only one. Prosecutors in Northern California brought 57 white-collar crime cases in fiscal year 2020. Even after accounting for the effect of Covid, cases have plunged from the peak of 350 in 1995.
Not every white-collar case is a tech case or related to start-ups, which means there are only a handful of times each year when someone in Silicon Valley is accused of a crime.
There are a lot of complicated reasons for this shortage of courtroom action.
A frequent explanation is that it is the fault of a lackluster U.S. attorney’s office in San Francisco. Few prosecutors come to the Bay Area to make their reputations, and those that do — like Robert Mueller 20 years ago — soon move on to better jobs. Mr. Mueller took over the F.B.I.
It’s not just a local issue. Fighting white-collar crime has been less of a priority for the Department of Justice since the Sept. 11 attacks brought fears of widespread terrorism.
And for all the growing awareness of the power of tech companies, there is little public demand to hold them accountable. When David Anderson stepped down as U.S. attorney for the Northern District of California early this year, he did an interview with a radio station. None of the questions from the host or from callers dealt with Silicon Valley.
Mr. Anderson, a Trump appointee, had talked about making Silicon Valley a priority for his prosecutors. His first public appearance was on a panel titled “White Collar Crime in a High-Tech World.” But he was in office for two years, too few to really make an impact. The district has had an acting U.S. attorney, Stephanie Hinds, since March.
Yet another reason is that Silicon Valley is a very rich place. That does not make government prosecutions impossible. But it ensures that top-flight defense attorneys can be brought in, making cases like Ms. Holmes’s neither short nor simple.
Finally, there is a sense in Silicon Valley that failure — whether a company that went under or an investment that was lost — is best kept in the family, far away from prosecutors, regulators and the media. Investors are supposed to be sophisticated, and a case like Ms. Holmes’s can reveal just how foolish and naïve they were. The same is true of employees.
Better to just forget about anything suspicious than allege fraudulent activity. After all, you wouldn’t want to miss out on the next opportunity.
The court is taking a break until around 12:10 p.m. Pacific time. Court is only scheduled to go until early afternoon today.
Mr. Downey walked Ms. Holmes through Theranos’s relationships with various pharmaceutical companies, including AstraZeneca, Merck, Bristol Myers and Centocor. Ms. Holmes testified that Theranos technology performed well in evaluations by those companies.
The defense is going chronologically through Ms. Holmes’s time at Theranos. Ms. Holmes is now testifying about pharmaceutical studies done during 2008-2009.
Mr. Downey showed a slide of “completed successes” on various pharmaceutical studies. Successes meant that “we had successfully achieved the objectives of the program,” Ms. Holmes said.
Theranos’s relationship with pharmaceutical companies has come up frequently in the trial so far. Scientists from Celgene, Pfizer and Schering-Plough testified about how they ultimately did not recommend Theranos’s technology. But Theranos still created a report displaying logos from Pfizer, Schering-Plough and GlaxoSmithKline, implying that those companies approved the report when they did not.
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In an exhibit showing results of a study on sepsis that Theranos did with Stanford, the company’s scientists concluded that “Assay results have been precise.”
Ms. Holmes testified, “It meant our system was working well.”
Mr. Downey then pulled up a section of a peer-reviewed journal which published the results of the study (without saying its name).
This is likely meant to rebut the prosecutor’s accusations that Theranos’s technology did not work and that Ms. Holmes was aware of the problems.
Mr. Downey asked Ms. Holmes about the areas in which Theranos attempted to partner with the Defense Department, emphasizing the word “attempt.” Theranos’s relationship with the military is a key part of the prosecution’s case — the prosecution highlighted that Ms. Holmes said Theranos signed contracts with the military, when it had not.
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Mr. Downey showed us a 2008 internal report listing features and technical specifications for Theranos’s devices, including “multiplexed measurement of biomarkers” and “factory calibration.” Ms. Holmes explained several of them and why they would be superior to normal testing methods.
The report also noted that Theranos systems had been in clinical evaluation. Ms. Holmes testified that she was told that the clinical results were “excellent.”
Automating the blood testing process was a major part of Theranos’s argument for why their devices were more accurate. Mr. Downey showed the jurors a paper saying that 93 percent of the errors in the diagnostic process were human errors that Theranos’s system would theoretically have helped automate.
White-collar defendants rarely take the stand because it opens them up to a potentially damaging cross-examination. Yet Elizabeth Holmes is testifying in her own defense.
Why take that chance?
Lawyers for Ms. Holmes, 37, may be betting that their client — who charmed investors and partners as she built Theranos to a $9 billion valuation before it collapsed — will be persuasive and charismatic enough to get 12 jurors on her side.
“They think they are behind, and they have a smart, likable, young, attractive witness,” said Neama Rahmani, who is the president of the West Coast Trial Lawyers and a former federal prosecutor. “And she thinks she’s going to talk her way out of it.”
Ms. Holmes’s testimony may also be the only way to show that she did not intend to deceive anyone, Mr. Rahmani said. She can speak about her relationship with Ramesh “Sunny” Balwani, 55, Theranos’s former chief operating officer and her former boyfriend. In court filings, she has said he was emotionally abusive and controlling. He has denied the allegations.
Ms. Holmes, who smiled and appeared relaxed when she took the stand on Friday, may also be hoping to present herself to the jury as a sympathetic figure. She had a baby in July and has showed up to the courtroom carrying a diaper bag and holding hands with her mother.
But by speaking in court, Ms. Holmes is taking a risk. That’s because she has previously made many statements about Theranos — both under oath and in media interviews — which prosecutors can grill her on.
“She’s going to be the best witness for herself, or the worst,” Mr. Rahmani said. “She may just kind of hang herself, so we’ll see.”
Those benefits included miniaturization and increased automation of the device. “We thought this was a really big idea,” she said.
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Ms. Holmes testified that by 2007, she believed Theranos’s technology had benefits over traditional blood testing methods.
As Ms. Holmes testifies, she is speaking slowly and clearly, looking directly at her attorney, Kevin Downey.
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Ms. Holmes has taken the stand and resumed discussing the Novartis demo she discussed on Friday. She explained that the problems in that demo — which have been reported on — were a result of a problem with the glue used to hold the device together, not the technology itself, and the company fixed the problem.
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The judge and jury have entered.
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The lead lawyers from both sides of the case emerged from the judge’s chambers and Ms. Holmes has taken her seat at the lawyer’s table in the courtroom. We are still waiting and have no word on what’s happening.
Elizabeth Holmes, the founder of the blood testing start-up Theranos, arrived in court on Monday for her second day of testimony. She came with her mother, Noel Holmes, and another person who has been a consistent presence alongside her at the trial: Billy Evans, her partner.
Mr. Evans’s family founded the Evans Hotel Group, a hotel chain in Southern California. He graduated from the Massachusetts Institute of Technology in 2015 and worked at a tech start-up until early 2019, according to his public LinkedIn page.
Not much is publicly known about Ms. Holmes’s relationship with Mr. Evans. The two were first seen together at the Burning Man festival in 2018, the year that Theranos shut down. Mr. Evans and Ms. Holmes, 37, had a child together in July; she often totes a diaper bag in court.
Mr. Evans often sits with the rest of Ms. Holmes’s family in their reserved row in the courtroom in San Jose, Calif., occasionally leaning over to confer with Noel Holmes during testimony. He and the other members of Ms. Holmes’s entourage keep to themselves and do not interact with the press or the public. He has declined to comment on the trial.
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After being ushered into the courtroom expecting a 9 a.m. start, we’ve now been waiting for nearly an hour. Kevin Downey and Jeffrey Schenk, the lead lawyers for Ms. Holmes and the prosecution, respectively, are not here. Nor are Ms. Holmes, Judge Edward Davila and the jury.
Since the trial’s opening statements, the legal team for Elizabeth Holmes, the founder of the failed blood testing start-up Theranos, has made it clear how they plan to defend their client from charges of fraud.
First, they have said: Ms. Holmes was a hardworking entrepreneur who believed her claims that Theranos’s technology was revolutionary and whose failure was not a crime. Second: Other Theranos employees, executives and investors should have known better. And third: Ms. Holmes was manipulated by Ramesh Balwani, who is known as Sunny and who was formerly Theranos’s chief operating officer and Ms. Holmes’s boyfriend.
“She did her level best, day in, day out, to make Theranos successful, and she genuinely, deeply believed it would be successful,” Lance Wade, one of Ms. Holmes’s lawyers, said during opening statements.
Theranos, which had been hailed as a successful Silicon Valley start-up, collapsed in scandal and shut down in 2018 after the company’s technology was shown to not work.
Over the first 11 weeks of the trial, Ms. Holmes’s lawyers have repeatedly pushed the first two points of their defense. They have sought to undercut testimony from lab employees by pointing to their advanced degrees and comparing that to Ms. Holmes, who dropped out of Stanford University. They have also attacked investors’ credibility by detailing their lack of due diligence.
As Ms. Holmes, 37, takes the stand for a second day, she may point the finger at Mr. Balwani. In court filings, she has said that Mr. Balwani, 55, was emotionally abusive and controlling during their relationship. Mr. Balwani, who will stand trial next year, has denied the allegations. Both have pleaded not guilty.
Because Ms. Holmes and Mr. Balwani kept their relationship secret while they worked at Theranos, jurors have heard very little about their interactions. Ms. Holmes’s testimony will likely be jurors’ first real insight into the inner workings of the relationship.
Ms. Holmes arrived hand-in-hand with her mother, Noel Holmes. She was also accompanied by her partner, Billy Evans, and various other members of her entourage, including two who arrived before 4 a.m. to wait in line with the rest of the public.
Both the courtroom and an overflow room are packed with spectators who arrived well before dawn. The courtroom is quiet as reporters pull out their laptops and everyone waits for testimony to start.
After waiting outside for hours, spectators have now filed into the courtroom for the second day of Elizabeth Holmes testifying in self-defense. (Because the proceedings are not live-streamed, standing in line is the only way to secure a spot inside.) Ms. Holmes, wearing a royal blue dress, has arrived at the courthouse, but is not yet in the courtroom. Neither are the judge nor jury.
The government’s case against Elizabeth Holmes, the founder of Theranos, featured several key pieces of evidence that showed she intentionally deceived doctors, patients and investors in the blood testing start-up.
A fraudulent report
In 2010, Theranos created a 55-page report that prominently displayed the logos of the pharmaceutical companies Pfizer, Schering-Plough and GlaxoSmithKline. Investors such as Lisa Peterson, who manages investments for the wealthy DeVos family, and Walter Mosley, whose clients include the Walton family, testified that the report had helped persuade them to invest in Theranos.
The problem? Pfizer, Schering-Plough and GlaxoSmithKline had not prepared or signed off on the report. While prosecutors did not establish that Ms. Holmes created the report, witnesses like Daniel Edlin, a former Theranos senior product manager, testified that she had signed off on all investor material.
An investor letter
Theranos spent years discussing with the Department of Defense the possible deployment of its technology in the battlefield, but no partnership materialized.
Yet Ms. Holmes told potential investors in a letter that Theranos had signed contracts with the U.S. military — claims that helped persuade them to invest, the investors testified.
“We really relied on the fact that they had been doing work for pharma companies and the government for years,” Ms. Peterson said.
Emails between Theranos employees made up the bulk of the prosecution’s exhibits. Some of the emails showed when Theranos hid device failures, removed abnormal results from test reports and fudged demonstrations of its blood testing.
In one case, Mr. Edlin asked a colleague for advice on how to demonstrate Theranos’s technology for potential investors.
Michael Craig, a Theranos software engineer, recommended that Mr. Edlin use the demo app, a special setting on Theranos’s devices that said “running” or “processing” if an error had taken place, rather than display the mistake.
The app would hide failures from the client, Mr. Craig wrote in an email.
“Never a bad thing,” Mr. Edlin replied. “Let’s go with demo, thanks.”
From the start, prosecutors have argued that Elizabeth Holmes intentionally deceived investors, doctors and patients as she sought investments and partnerships for Theranos, her once highflying blood testing start-up.
In opening statements on Sept. 8, Robert Leach, the assistant U.S. attorney who is the lead prosecutor in the case, laid out the government’s central thesis: that Ms. Holmes courted investors and commercial partners with false claims about her company’s technology and its relationships with pharmaceutical companies and the military.
“Out of time and out of money, Elizabeth Holmes decided to lie,” he repeatedly declared.
To make that case, prosecutors called 29 witnesses to the stand. They included eight former Theranos employees, six investors, three commercial partners, two doctors and three patients. From a star-studded list of nearly 200 people the government had listed as potential witnesses, the highest-profile person to appear was former Defense Secretary James Mattis, who had served on Theranos’s board.
Prosecutors presented evidence to show that Ms. Holmes perpetrated deceit, including that she knew of technology demonstrations that hid Theranos’s failures and was aware the company made false claims of working with the military. They also showed that Theranos had used a report with a pharmaceutical company’s logo to imply it had that company’s backing, even though the firm had not signed off on the report. Investors and partners testified that those claims had helped persuade them to give Theranos their business and money.
The prosecution also detailed the dysfunction within Theranos’s lab, which handled the blood tests. Theranos had trumpeted its claim that its tests could discern various illnesses in patients with just a drop of blood.
But Adam Rosendorff, one of Theranos’s former lab directors, spent six days on the stand explaining that the tests repeatedly produced inaccurate and irregular results. Other lab directors testified that they had essentially been figureheads; one spent just five to 10 hours at Theranos over his tenure.
Daniel Edlin, a former senior product manager and Holmes family friend, testified that Ms. Holmes had signed off on Theranos’s marketing and investor materials. He also said Ramesh Balwani, the chief operating officer and Ms. Holmes’s onetime boyfriend, who is known as Sunny, had deferred to her when the two of them disagreed.
“Generally, she was the C.E.O., so she had the final decision-making authority,” Mr. Edlin said.
[Follow live news updates on the fraud trial of Elizabeth Holmes.]
In 2018, the United States charged Elizabeth Holmes and her business partner, Ramesh “Sunny” Balwani, with nine counts of wire fraud and two counts of conspiracy to commit wire fraud.
The indictment accuses the pair of engaging in a “scheme, plan and artifice to defraud investors as to a material matter.”
In other words, they are accused of lying about Theranos’s business and technology to get money. The lies outlined in the indictment include claims Theranos made about its relationship with the military and the status of its partnership with Walgreens. Prosecutors also say that Theranos faked demonstrations of its technology and falsified validation reports from pharmaceutical companies and the financial health of its business.
Wire fraud is a felony that carries a maximum penalty of 20 years and potential fines. Theranos also paid a $500,000 fine to settle civil securities fraud charges with the Securities and Exchange Commission in 2018. It also settled multiple lawsuits with investors and partners before dissolving that year.
Since the criminal indictment, the cases of Ms. Holmes and Mr. Balwani have been separated. Mr. Balwani faces trial next year. Further, some of the charges against Ms. Holmes have been dropped and others added. As of today, Ms. Holmes faces 11 counts of fraud and conspiracy to commit fraud.
She has pleaded not guilty.
At the end of a grueling five days of testimony this week, the defense in the case of United States v. Elizabeth Holmes on Friday called Ms. Holmes, the founder of the failed blood testing start-up Theranos, to the stand.
A flutter of typing and murmuring washed over the gallery, which had been packed with spectators early in the day, before the audience dwindled as the weekend crept closer. Ms. Holmes has been charged with 11 counts of defrauding investors about what Theranos’s technology could do and about its business.
Ms. Holmes, 37, spent only an hour on the stand before the court closed for the day, so her testimony was truncated. What she discussed were the early days of Theranos and why she had set the company up — and she used the opportunity to present herself in her own terms after her emails, texts and other communications were dissected over the trial’s nearly three months of testimony.
Ms. Holmes’s lawyers have argued that she was merely a young, naïve, ambitious founder who relied too much on others who gave her bad advice. Her lawyers have also hammered on her lack of experience and expertise. But on Friday, she presented herself as an expert on her company’s technology.
She testified about the early days of Theranos, which started out as Realtime Cures in 2003. She testified about a patent she had created while a student at Stanford, which led her to drop out and work on the company full time. She also briefly discussed demonstrations of Theranos’s early technology and the early rounds of investment she raised to develop it.
Ms. Holmes’s lawyers indicated that her initial testimony is likely to take up Monday and Tuesday next week. That means that the prosecution’s cross-examination, which is expected to be lengthy, won’t begin until after Thanksgiving.
Ms. Holmes was the third witness to be called by her defense team.
Elizabeth Holmes, the founder of the failed blood testing start-up Theranos, surrounded herself with a constellation of moguls, four-star generals, venture capitalists and others during her time running the company. Ultimately, Theranos was undone after whistle-blowers who were concerned that the company was lying about its technology spoke to the media and to regulators.
Here are some of the central figures in the rise and fall of Theranos and Ms. Holmes’s fraud trial.
Elizabeth Holmes, the disgraced founder of the blood testing start-up Theranos, stands trial for two counts of conspiracy to commit wire fraud and nine counts of wire fraud.
Here are some of the key figures in the case →
It’s Silicon Valley’s trial of the decade.
Since opening statements began on Sept. 8, Elizabeth Holmes, the founder of the failed blood testing start-up Theranos, has been standing trial in federal court in San Jose, Calif., for 11 counts of fraud (a 12th count was removed). If convicted, she faces up to 20 years in prison. She has pleaded not guilty.
Her case has captivated the public — and spawned books, documentaries and even a fan club for Ms. Holmes, 37 — because she was a young female entrepreneur in heavily male Silicon Valley and because she appeared to push the boundaries of start-up culture and hubris to the limit.
Her story initially seemed like the stuff dreams are made of. Ms. Holmes dropped out of Stanford University at 19 and founded Theranos, which promised to decipher people’s health problems with just a drop of their blood. The company raised $945 million from famous venture capitalists and from powerful tech and media moguls such as Larry Ellison and Rupert Murdoch. At its peak, Theranos was valued at $9 billion. Ms. Holmes was lauded as one of the youngest self-made female billionaires.
But it all came crashing down after a 2015 investigation from The Wall Street Journal found that Theranos’s blood-testing technology didn’t work. Theranos shut down in 2018.
Now Ms. Holmes is on trial over a central issue: Did she intentionally mislead doctors, patients and investors as she sought investments and partnerships?
The prosecution spent weeks arguing that Ms. Holmes purposely deceived investors and others while knowing that Theranos’s blood tests were often inaccurate and that the company relied on third-party commercial machines. In opening statements, Ms. Holmes’s lawyers asserted that she was simply a hardworking entrepreneur whose failure to achieve lofty aims did not constitute a crime.
Ms. Holmes vocally defended herself in the media after The Wall Street Journal’s revelations about Theranos. The jury — and public — will be eager to hear directly from her and to see whether she continues that stance or instead points fingers at others, such as her former business and romantic partner, Ramesh Balwani, who is known as Sunny.
The trial has played out inside a courtroom presided over by Judge Edward J. Davila of the U.S. District Court for the Northern District of California, with no live broadcast of the proceedings. Jury selection began on Aug. 31 and the case is scheduled to finish on Dec. 10.