What we have learned so far from the testimony of Elizabeth Holmes

But over the course of two days this week, and a brief appearance the week before, Holmes has almost taken the stand Nine hours before a crowded courtroom in San Jose. She testified about the origins of Theranos and the development of blood testing devices and the positive comments she claimed to have received along the way.

Holmes admitted some of the prosecution’s most damning allegations while offering alternative explanations. Sometimes, she showed some sorrow. But during her testimony, she tried to raise the suspicion that she had any intent to deceive – a key part of what federal prosecutors are trying to prove. It has also shifted responsibility to others simply by naming who has occupied certain positions in the company.

“The defense could benefit if it could undermine the government narrative that Holmes was aware of and the face of the alleged fraud at Theranos,” Miriam Baer, ​​a professor at Brooklyn Law School, told CNN Business.

For Holmes, 37, the stakes couldn’t be greater. Holmes faces 11 counts of criminal fraud over allegations that she knowingly misled investors, patients and doctors about Theranos’ capabilities for financial gain. Holmes, who has pleaded not guilty, faces up to 20 years in prison and a $250,000 fine, plus compensation, for each charge of wire fraud and each conspiracy.

Leaving Stanford University, Holmes founded Theranos at age 19 with a lofty mission to revolutionize blood testing and spent a decade working under the radar in its quest to do so. By 2013, the company claimed to have developed a revolutionary blood-screening technology that could perform a range of tests accurately, reliably, and efficiently using just a few drops of blood.

Holmes was hailed as a remarkable success story. She has been praised on magazine covers as the richest self-made woman and the “next Steve Jobs”. It raised $945 million from investors, and once valued the startup at $9 billion. Then it all started to unravel when a Wall Street Journal reporter started punching holes in the company’s allegations.

Holmes is scheduled to resume testimony next week when the hearing returns to hearing on Monday, November 29 at 10 a.m. local time. After her lawyer finishes questioning her, he takes the role of the prosecution. That’s what we’ve learned so far from her time at the witness stand.

Holmes personally added pharmaceutical slogans to reports that investors reported misleading them

In one of the most striking moments in her testimony to date, Holmes admitted that she was the person who put logos from drug companies Pfizer and Schering-Plow on reports prepared by Theranos before they were circulated.

Several investors and trading partners testified that they believed the reports from pharmaceutical companies and indicated that they supported Theranos technology.

During its case, the government tried and failed to determine who added the logos to the reports at Theranos. But, on Tuesday, Holmes’ attorney Kevin Downey asked her, “Who added those companies’ logos to the header of those documents?” Holmes testified: “I did.”

“This work was done in partnership with those companies, and I was trying to convey that,” Holmes said. She admitted that she had heard previous testimonies from witnesses who believed the reports were from pharmaceutical companies. “I wish I could have done it differently,” she testified.

Elizabeth Holmes, Theranos Inc.  , arriving in Federal Court in San Jose, California, United States, on Monday, November 22, 2021.

Holmes acknowledges the use of modified third-party hardware

Holmes also confirmed that the company used commercially sold lab equipment to test patient samples and testified that Theranos withheld this information from several people, including at least one major retail partner.

While witness testimony suggested Theranos’ relied on third-party machines due to its technology failures, Holmes portrayed the decision as a response to absorbing a major retail partnership with Walgreens.

She testified that the retailer decided not to bring Theranos devices into its stores until the startup received regulatory approval. Theranos testified that she “agreed to do what Walgreens wanted”, and set up a central lab.

The trial of Elizabeth Holmes: a journalist who helped & # 39 ;  in rising to the fore & # 39 ;  Theranos CEO takes a witness stand

But Holmes said that at a certain point, it became impractical for her proprietary devices — which she said were meant to be operated by a “layman or technician in a shop” and process one sample at a time — to run tests in the central lab. For this reason, she said, Theranos “created inventions” on commercial laboratory equipment, modifying it to process small amounts of blood.

who – which Holmes testified that the collection was considered a “trade secret”. As a result, Theranos hasn’t said much about its dependence on these machines, including Walgreens.

Holmes suspended the decision to withhold information from her firm’s attorney. “This was an invention that we understood from our advice that we had to protect it as a trade secret,” she said. “Big medical device companies like Siemens can easily reproduce what we did if they know what we’re doing…so the advice was to keep it secret so Theranos has a chance to make a profit from this invention.”

Holmes testified that Theranos had disclosed its use of third-party devices to the US Food and Drug Administration as well as to members of its board of directors. However, one of its prominent board members, former Defense Secretary James Mattis, testified earlier at the trial that he did not recall these details. coming.

Holmes mentions a major name for the first time

After two days on the witness stand, Holmes finally mentions the name “Sunny Balwani,” her ex-boyfriend who served as COO at Theranos. Before the trial began, court documents indicated that she may testify that she was the victim of a decade’s psychological, emotional, and sexual relationship with Balwani. The allegations, which Balwani’s lawyers have denied, are intended to speak to her mental state at the time of the alleged fraud.

So far, Holmes has not testified about the personal nature of their relationship at all.

She was first mentioned as someone who was involved in the company’s negotiations with Walgreens. Then I mentioned him several times, including being in charge of financial documents and projections. One of the ways in which the government claimed that Theranos misled investors was through false and misleading financial data and models.

Al-Balwani will face the same charges as Holmes when his trial begins next year. He also pleaded not guilty.

The charm and charm of Holmes in full view

For the first time, jurors were able to see Holmes’ charisma – who helped convince talented investors, CEOs, and CEOs – to bet on the company – in full.

Holmes, unmasked and with her head tilted slightly, engaged in strong eye contact with her attorney as he questioned her. She confidently and deliberately answered his questions. At times, she would have a little laugh, a smile, and even a little bit of information that might humanize her to the jury. When asked on Tuesday, for example, if she knew the closing date of a particular investment, she said, “I know because it was my birthday. February 3 of that year.”

On scheduled breaks, Holmes can be seen cuddling friends and family members. Her mother, Noel, has been a constant in the courtroom since the trial began. Her partner, Billy Evans, is also often present. A small group of unknown others, apparently friends or family, were in the courtroom to witness her testimony.


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