Elizabeth Holmes, the founder of Theranos, lost her request to remain free on bail as her appeal to overturn her conviction was denied by a California judge. Holmes is the former leader of the infamous medical technology startup that promised investors and consumers a radically new way of testing for... Read More »
Theranos Founder Elizabeth Holmes Swaps Ambition for Vulnerability in Trial’s First Days
As the nation’s biggest white-collar crime in recent times sees its early days in the courtroom play out, many are watching with anticipation to see what will become of disgraced Silicon Valley darling Elizabeth Holmes and her sham of a revolutionary startup, Theranos.
Holmes’ trial began this week over three years since she and her co-conspirator and then-boyfriend, Ramesh “Sunny” Balwani were formally indicted by a federal grand jury. Holmes faces charges including defrauding investors out of over $700 million.
In 2013, Theranos made waves in the world of startups as a revolutionary biotech company that could change the way individuals understood their medical dispositions. Holmes touted that her company had developed cutting-edge technology that used only a single drop of blood to run a range of health tests. Not only could these tests screen for harmful diseases like diabetes and possible cancers, but Holmes touted that the tests could be done at cutting edge speeds and at a fraction of the cost of traditional methods.
Despite Holmes’ extraordinary claims and little evidence to back them up, many high-profile investors bought into the company’s ambitious goals. Between the many venture capitalists and private investors who poured money into Theranos, Holmes was able to raise over $700 million in funding. As indicated in now unsealed documents from the many lawsuits brought against the company, notable investors included the Walton family who invested $150 million, Rupert Murdoch who dished out $125 million, and former secretary of Education Betsy Devos whose family invested $100 million.
As the company reached its peak in 2013 and 2014 with a valuation of over $10 billion, investigative journalist John Carreyrou of the Wall Street Journal along with medical research professors John Ioannidis and Eleftherios Diamandis began to unveil the cracks in the company after they questioned the company’s validity. A string of lawsuits riddled the company, and the once celebrated darling of Silicon Valley found herself and her company at the center of one of the nation’s biggest fraud investigations.
The extraordinary lie was one facet of the allure of Holmes. Coupled with her obvious imitation of pioneer Steve Jobs through her staple black turtleneck and iconic monotone voice that seemed to morph before the public’s eye, Holmes quickly became a symbol for Silicon Valley’s cutthroat, fake it till you make it scene. In the case of Holmes and her company, her rise to the top appeared to be larger than Theranos itself, resulting in a fall that has had rippling effects on investors, patients, and even the start-up industry.
As the jury selection is underway, it is unclear how long the process will take considering the notoriety associated with Holmes and her co-conspirators. Finding jurors who are impartial to the case or have not heard of Holmes or Theranos is proving to be as challenging as expected.
After appearing in court earlier this week, Holmes’ demeanor portrayed a different image than that which was associated with her during the rise of Theranos. The new mom showed an unfamiliar air of vulnerability that has led critics to consider whether this is just another deceptive attempt to sell the public on another lie.
Holmes’ apparent vulnerability extends past her appearance and into her actual defense. According to the Washington Post, newly unsealed documents show that Holmes and her defense team are looking to play up the vulnerability card with a unique defense. It is expected that Holmes will likely testify that her then ex-boyfriend and former COO of Theranos, Balwani, was an abusive partner who contributed to her downfall.
One unsealed Balwani filing notes this strategy and explains, “Ms. Holmes plans to introduce evidence that Mr. Balwani verbally disparaged her and withdrew ‘affection if she displeased him’; controlled what she ate, how she dressed, how much money she could spend, who she could interact with — essentially dominating her and erasing her capacity to make decisions.”
This unexpected defense is a stark difference from the portrayal of who Holmes was during the peak of her company. Holmes’ defense team has publicly shared that it is “highly likely” that evidence showing intimate partner abuse will be brought forward in the trial.
In addition to the striking accusation of abuse during the course of Holmes’ reign, up for debate is whether or not Holmes will take the stand in her defense. The unsealed filings appear to indicate that Holmes’ team may be going this route. The filings depict, “Ms. Holmes is likely to testify herself to the reasons why she believed, relied on, and deferred to Mr. Balwani.”
A final angle that has many onlookers wondering is what other witnesses will be pulled to testify. The extensive witness pool includes hundreds of individuals including former employees at Theranos who witnessed the discussion of third-party commercially available blood diagnostic machines, patients who used Theranos’ services, and investors who believed in the company.
At the time of the indictment, both Balwani and Holmes were charged together. However, their cases were later separated. It is expected that jury selection should wrap up by September 8th for the trial to proceed; however, the process could face some bumps because of how well known the case is. Balwani’s trial is scheduled to start in January.
Related Articles
Former Theranos executive Ramesh ‘Sunny’ Balwani was recently sentenced to 13 years in prison after being convicted on 12 counts of wire fraud and conspiracy. Balwani appealed his conviction, and he’s asked the district court to release him from prison while his appeal is pending. Elizabeth Holmes, the founder and... Read More »
After a spectacular fall from grace, Elizabeth Holmes, the disgraced former founder and CEO of Theranos, was sentenced to 11 years and three months in federal prison for defrauding numerous investors out of almost $1 billion. Ms. Holmes, 38, was convicted on four wire fraud counts due to her deceiving... Read More »
A jury of four women and eight men deliberated for more than fifty hours and returned with a unanimous guilty verdict convicting Elizabeth Holmes, 37, founder of biotech company Theranos, of three counts of wire fraud and one count of conspiracy to commit wire fraud. In total, she had been... Read More »