Thursday, February 2

Elizabeth Holmes Trial: Jury Found Theranos Founder Guilty of Four Counts of Fraud | Theranos


Theranos founder Elizabeth Holmes was found guilty on four of the 11 counts of fraud after a jury rendered a partial verdict after a dramatic day in which jurors said they remained stuck on three counts.

Jurors announced the decision after a 15-week high-profile test that chronicled the missteps of the now-defunct blood testing company.

On Monday, the seventh day of deliberations, the jury said in a note to the judge that it could not reach a unanimous verdict on three of the 11 criminal charges Holmes faced. In response, US District Judge Edward Dávila encouraged them to continue deliberating, but the jurors returned later and said they could not continue, before issuing their final decision.

Holmes, 37, was charged with 11 counts of defrauding investors and patients and faces 20 years in prison. She has pleaded not guilty.

The verdict seals Holmes’s extraordinary rise and fall and could have far-reaching consequences for Silicon Valley. Over the course of nearly four months, federal prosecutors called 29 witnesses, describing the missteps and alleged fraud that Holmes committed during her 15-year reign as CEO.

Holmes founded the company after leaving Stanford at age 19, promising breakthrough technology that could run hundreds of health tests with just one drop of blood. But the company ultimately fell short of its ambitious commitment.

A charismatic character known for his blonde hair, black turtleneck uniform, and low voice, Holmes quickly rose to fame in and out of the tech world, gracing the covers of major magazines, headlining conferences, and drawing comparisons to Apple’s Steve Jobs. As Theranos grew, the company attracted big-name investors, including former Secretary of State George Schultz and Henry Kissinger. At its peak, Theranos was valued at more than $ 9 billion.

But cracks in the glossy surface began to appear in 2015 when Wall Street Journal reports revealed that its internal tests had massive inaccuracies and that the company was conducting other tests using traditional blood draw methodology and outside labs.

Theranos’s downfall has been followed perhaps with more fervor than its spectacular rise, inspiring multiple documentaries, a feature film, and an upcoming television show. Starting in late August, a crowd of reporters lined up in the early hours of the morning to take a seat inside federal court in San Jose, California.

During the trial, prosecutors described Holmes as a strict and power-hungry leader willing to do whatever she can to save her company’s image, cracking down on internal and external dissent and manipulating the press.

“She chose fraud over business failure,” said prosecutor Jeff Schenk in his closing arguments. “She chose to be dishonest with investors and patients. That choice was not only insensitive, it was criminal. “

As witnesses, the prosecution called the directors of Theranos laboratory, who testified that their concerns about the technology’s shortcomings were largely ignored. Meanwhile, investors like former US Defense Secretary James Mattis said he and others were discouraged from scrutinizing the company for fear of missing opportunities.

Holmes’s defense team tried to counter that image by portraying Holmes as an ambitious entrepreneur who did not knowingly commit fraud, but did not understand the shortcomings of Theranos’ complex technology.

Those arguments came to a head when Holmes made the surprising decision to take the stand in his own defense, arguing that he made decisions in good faith and did not knowingly commit fraud.

Prosecutors repeatedly pointed to documents that Holmes admitted to being a doctor before sharing them with potential partners, adding the logos of pharmaceutical companies and falsely implying that they had endorsed the methodology.

“I wish I hadn’t done that,” he told the jury on the stand. His defense team stated in closing arguments that the logo evidence was “distracting” and that Holmes was in discussion with those companies at the time.

His attorneys also presented a line of defense that Holmes was abused by his former romantic and business partner Sunny Balwani, who served for ten years as co-chairman of the company.

“There was another aspect of Holmes’ relationship with Balwani that the public never saw,” defense attorney Lance Wade said in opening arguments, adding that “trusting [Balwani] as his main advisor was one of his mistakes ”.

Some of the most powerful moments of the trial came when Holmes testified directly about Balwani’s alleged abuse, and was thrilled when the prosecution asked her to read his romantic texts. She claimed that he controlled what she did, who she hung out with, and even what she ate in an effort to make her a successful CEO.

Balwani has flatly denied allegations of mistreating Holmes. He faces his own trial in 2022 for fraud.


www.theguardian.com

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