The founder and CEO of Theranos has been found guilty. The jury has reached a verdict after seven days of deliberations and four months of court proceedings.
Two counts of conspiracy to commit wire fraud and nine counts of wire fraud were committed by the former youngest and wealthiest female self-made billionaire. The jury found him guilty of scheming to defraud investors, as well as defrauding investors from the DeVos family, Brian Grossman, and a former estate and trust attorney. She was not found guilty of any of the charges. There were three counts of wire fraud that the jury did not reach a verdict on.
Theranos was founded by Holmes after he dropped out of school. She pitched investors and partners on technology that would change the healthcare system by using a small amount of blood to conduct dozens of tests in a single day. She was the CEO of a company with a $10 billion valuation, but the technology didn't work.
The criminal trial of Theranos co-owner James Holmes began this fall after delays due to the Pandemic and the birth of his child. The prosecution questioned witnesses like former U.S. Secretary of Defense James Mattis, Theranos patients, investors, medical professionals and journalists.
Even though Theranos' technology didn't actually accomplish what the company claimed it did, the company's founder, Elizabeth "Betty"Holmes, said that she thought she was telling the truth. One piece of evidence showed that Theranos used Pfizer's logo in an unauthorized manner while negotiating a partnership with Walgreens. Daniel Edlin was a senior product manager at Theranos. Edlin said that when Murdoch had his blood tested, Theranos removed abnormal results before sending them out.
In a big twist for the high-profile trial,Holmes took the stand herself to argue that her failure as a start-up founder doesn't mean she committed fraud. In a key moment, she accused Theranos COOSunny Balwani of abusing her.
Balwani, who is facing a separate trial next year, was a secret boyfriend ofHolmes. After she dropped out of school, Balwani moved in with him, and they met when he was 18. She said during the trial that she was raped while she was a student at the university. She decided she was going to build a life by building this company. She detailed Balwani's controlling behavior, including a written document that dictated her daily schedule, as well as what she ate when she slept. She said that he was trying to teach her how to be better.
The jury asked if they could take jury instructions home to review. They asked to re- listen to the audio clips of the calls that were presented to investors, yet deliberations continued into the new year.
On the seventh day of deliberations, the jury told the judge that it could not reach a unanimous verdict on three of the eleven counts. The prosecution suggested that the judge read the jury an instructional document on what to do if there is a hung jury. The judge proceeded to deliver the instructions despite the defense saying they could be seen as coercive. He told the jury that they would be presumed innocent until proven guilty. Four hours later, the jury submitted a note stating that it could not reach a unanimous verdict on three charges. They gave their verdict on the other eight counts.
The deliberations in a prominent white collar trial are expected to take a long time. Ghislaine Maxwell was found guilty of five of six charges after the jury deliberated for five days. Conrad Black was found guilty of fraud after a 14-week trial.
The verdict in the trial shows that it is not okay to lie about your technology when it affects the health of real people. She was found not guilty of the counts related to defrauding patients. The case showed how important due diligence is for investors and partners. The investors of Theranos were not the usual suspects of venture capital firms. Wealthy elites like former Secretary of State Henry Kissinger and billionaire media mogul Murdoch funded her. The investors were willing to give money even when the questions were not asked.
The investors wrongly believed in Theranos and other factors propelled the tech forward. Theranos and other companies have been able to use regulatory loopholes to get their devices into the market.
Theranos is still a thing of the past. Balwani is going to have a criminal fraud trial next year.
The story is developing.
Theranos founder testifies in her own trial.
