Elizabeth Holmes' failure to make her startup Theranos, a blood-testing technology startup, a viable business, was not a crime, her attorneys told a federal jury. This is the beginning of a closely monitored trial that will examine her mental health and Silicon Valleys promotion culture.
Lance Wade, an attorney for Elizabeth Holmes, stated that Elizabeth Holmes didn't go to work each day with the intention to cheat, lie, or steal. The government would like you to believe that her entire life was a fraud.
Holmes, 37, spent 15 years working to make laboratory testing more affordable and accessible. Wade said that she poured her heart and soul into this effort.
Theranos was ultimately defeated. Ms. Holmes was left with nothing. Failure isn't a crime. It is okay to fail even if you try your best.
A trial at a US federal court, San Jose promises to be one the most prominent tests of alleged wrongdoing. Silicon Valley is experiencing a boom in startup funding.
A US prosecutor stated earlier that Holmes intentionally deceived investors and customers to make a quick buck. Robert Leach, an assistant US attorney, stated that this case is about fraud and about lying to get money.
Prosecutors tried to tie Theranos' business problems to Holmes' behavior. They claimed that the company was close to financial ruin twice if it couldn't raise more capital.
Leach stated that Elizabeth Holmes chose to lie because she was short of time and had no money.
Advertisement
Holmes is charged with 10 counts each of wire fraud, and two counts each of conspiracy to commit fraud. She has pleaded guilty. She could be sentenced to a maximum of 20 years imprisonment if convicted.
The grey skirt suit she wore to San Jose was a departure from her black turtleneck, which was her signature style at the peak of her fame.
Holmes founded Theranos in 2003. It is based in Palo Alto. The company was valued at $9 billion by investors in 2014.
In 2018, however, US Department of Justice prosecutors indicted Holmes, Ramesh Balwani and Ramesh Balwani as former presidents of Theranos. They claimed that they promoted Theranos' technology while knowing its reliability issues.
It is important that the prosecutor proves she knew that these tests weren't working. This is Cheryl Bader, an associate law professor at Fordham University and former federal prosecutor.
The prosecutors claim that Holmes and Balwani also misrepresented Therano's financial situation to investors. They claimed that Theranos would earn $1 billion in revenue in 2015, when it had only modest sales.
Holmes lawyers have tried to dismiss the case before, arguing that indictment was too vague. In October 2013, Judge Edward Davila denied the motions of Holmes attorneys.
Davila directed that the two defendants be tried separately in March 2020. Holmes' attorneys argued that Balwani (her ex-boyfriend) abused Theranos founder and influenced Holmes' judgment. Balwani denies the allegations.
The prosecution has submitted a list that includes Henry Kissinger (a former board member); David Boies, the company's previous outside counsel; Rupert Murdoch, a media mogul, and Rupert Murdoch who was an investor at Theranos.
Holmes' lawyers have indicated that they may call John Carreyrou, a former Wall Street Journal reporter who investigated Theranos and helped to precipitate the company's collapse. The trial is expected to last several months and Holmes is not expected to testify.
2021 The Financial Times Ltd. All Rights Reserved.
