She testified today that she was the most invested in the company. She owned a lot of stock. The entire board of directors could be fired.
Is that fair? In his cross-examination, the prosecutor asked the question. The buck stops with you.
"I felt that," he replied.
The defense has mostly blamed other people, including the lab directors, the marketing firm, and more. In her trial, she portrayed herself as a true believer in Theranos technology who was largely unaware of the company's problems.
She admitted to the testimony in order to get it knocked down.
In late 2013, Theranos was in a financial situation.
Adding logos to drug companies and changing the text of reports Theranos had written for them were all done by the company.
The Wall Street Journal tried to control John Carreyrou's story by trying to kill it by contacting the WSJ's owner, Murdoch.
The law firm Boies Schiller Flexner was sent after Carreyrou.
Lawyers review the language on the Theranos website, then ignore their suggestions in the slide decks presented to investors afterwards.
Balwani was asked to leave the company.
Cash rules everything around me.
The jurors looked at an excel sheet.
Theranos ran out of money in August. The company had to pay back money to Blue Cross Blue Shield because Theranos didn't meet the conditions of their contract. On the week of September 23, Theranos had $14.5 million left in free cash. The company was close to being out of money. I never thought of it that way.
The cash crunch hadn't ended after Theranos raised $21.9 million from investors. In December of last year, Balwani sent a text toHolmes warning her that they were down to 15 million free cash. She said she saw that.
Theranos needed money fast.
There is a little editing.
In her testimony, she admitted that she had added logos to the reports Theranos prepared for drug companies before sending them to Walgreens. The recipients thought the logos meant the reports hadn't been prepared by Theranos, according to testimony in the trial. She said that adding those logos was an honest mistake and that she only wanted to convey the partnership. She regretted that people had been deceived.
We were shown excerpts of the contracts that Theranos had with drug companies.
The logos weren't the only ones that changed.
The logos weren't the only ones that changed. The text that might have made it easier to figure out the report was made for Pfizer was removed. Some of the language in the conclusion section was changed to be more flattering to Theranos, after a memo was added with a logo. She was defiant and said she thought it was reflecting the data in the document.
She sent out a document from a drug company. It had also been altered. The original was a word document with no logo. The logo was added by Holmes. One of the conclusions was deleted, and it said that the finger-prick/blood draw procedure was difficult.
Is this deletion made by Holmes? She didn't know. She didn't know who made the changes to the documents. I was not sure if this was true since she had changed the documents before.
There was bad blood.
The Wall Street Journal reporter John Carreyrou had an investigation into Theranos and the company got wind of it. They hired a firm to do that. She told Balwani that the oppo guy knew him.
She said that they would get a killer package when they met with Carreyrou. I honestly don't know what else it could be, but she said she didn't know if that was a reference to work with FusionGPS.
She asked Murdoch to invest in Theranos.
Balwani was told to get ahead of it. She was shown the text and asked if she remembered. She said that it didn't change her memory.
There were attempts to control Carreyrou's reporting. Carreyrou was going to visit a Theranos center, but the two men were texting about whether they should intervene to make sure he didn't get a fingerstick test.
We read some texts that mocked Carreyrou for being French.
Murdoch was the major Theranos investor when the attempts to kill Carreyrou's stories didn't work. Murdoch is the owner of the WSJ and the inspiration for the menacing patriarch on the excellent television show Succession. She tried to get him to broker a meeting between a senior WSJ staffer and the lawyers of Theranos. The material Theranos has shared with WSJ has been attached since John Carreryrou asked about it. She wrote that she would want to know if she was in your shoes.
Carreyrou's story was not killed byHolmes. She went on Jim Cramer's show to deny the central claims, so we watched the clip in court. Cramer was told that every test can be run on the proprietary devices. Only 12 tests ran on Theranos devices, less than the 15 Carreyrou reported.
As she watched the video, she pressed her lips together.
Retaliation.
Balwani tried to figure out who Carreyrou's sources were in the effort to get ahead of the story. To 5 people. Balwani said they would nail this motherfucker.
She asked, who do you think? We have legal grounds now.
Theranos will consider all remedies, including a lawsuit against you.
In court, she claimed that she and Balwani were talking about the bad reviews on Glassdoor.
Carreyrou had sources that were identified as Tyler Shultz,Cheung and Adam. They had barely interacted, so they didn't ask who Cheung was. The issues Cheung raised were the same ones regulators found in the Theranos lab. "I wish we treated her differently," he said.
Cheung was told to cease and desist from her activities. Theranos will consider all remedies, including a lawsuit against you. She said she was only trying to protect trade secrets.
Cheung was served with a threatening letter. Shultz was surprised by the lawyers at his grandfather's house. Shultz's grandfather, George, was a mentor and sat on the board of directors. He angrily called her about the ambush.
It's better.
A lawyer was hired to review marketing materials before the Walgreens launch. The lawyer is worried because he hasn't worked his way through the whole website. Every time you say you are better than, you are making a comparative claim to all market leaders.
We saw a list of proposed language changes, which included replacing the word "highest quality" with "high quality", "highest levels of accuracy", and "more precise" to "precise". Lawyers suggested making sure that the claims were substantiated.
She ignored the lawyers.
She ignored the lawyers when she wanted more money.
Bryan Grossman was sent a powerpoint presentation about three months later. One slide said that Theranos provides the highest level of oversight, automation and standardization. One person said that Theranos tests had the highest levels of accuracy.
Lisa Peterson, who led an investment in Theranos, received a Powerpoint that said the high-complexity lab requires the highest level of training. It didn't mention that all of the testing took place on conventional machines. She didn't mention modified conventional machines with any investors, but she did mention the slide.
Balwani texts.
There were a lot of texts between Balwani and Holmes. The use of those texts to try to cast doubt on the claims that Balwani abused her was the least successful.
The prosecution brought tears to the eyes ofHolmes when they talked about his relationship with Balwani. She said that his treatment affected everything about who she was.
I think I asked for permission to see my friends.
She testified that she had to get his approval to live her life despite being Balwani's boss at Theranos. She asked if it was okay for her to see friends in the morning if she was home by 11AM. I think I was asking for permission to see my friends. I tried to ask him if it was okay for me to see a friend before I went to work.
Do you know how many times the word love appears in these texts? Today, he asked. She was not surprised to hear it was 594 times. She cried when she was told to read the tender exchanges to the court. Business was mixed in with the affection, as when Balwani sent her a text that he was worried about her.
It was difficult to tell what the jury thought of this testimony, as a few jurors shifted in their seats. It gave the defense a chance to challenge the prosecutions overreach.
The prosecution's case was strengthened by some of the testimony ofHolmes. She said she could have fired Balwani at any time. He was asked to leave Theranos. She said that she ended their relationship because of her disillusionment with him after a lab audit turned up a lot of problems.
Who is Elizabeth?
The portrait painted on the cross-examination showed a CEO who was in control of her company, and who was working to make sure that its presentation to the world was what she wanted it to be.
We were told that he was young and naive. She had made some mistakes, but she had also delegated a lot of experts. Those mistakes were not really criminal.
We saw someone who wanted to make the story of Theranos bigger than life. The memos were doctored to make Theranos more appealing. She tried to kill a news story by texting and email. She tried to punish the sources when she couldn't get to the reporter. She ignored their advice when she made investor presentations.
The jury will decide if he is guilty of fraud. What is still up for debate? She was working at Theranos.
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