Elizabeth Holmes fraud trial: What to expect in the case against the ex-Theranos CEO

Remove this Banner Ad

JackNah_8

Hall of Famer
Jan 15, 2012
45,552
44,146
AFL Club
Richmond
Elizabeth Holmes fraud trial: What to expect in the case against the ex-Theranos CEO
Alexis Keenan
·Reporter


One of Silicon Valley’s most infamous entrepreneurs, Elizabeth Holmes, is scheduled to stand trial on Aug. 31 to defend accusations that she used her biotech startup, Theranos, to commit criminal fraud.

Holmes, 37, once proclaimed the youngest female self-made billionaire — and featured in Yahoo Finance’s new documentary "Valley of Hype," streaming on Yahoo Finance starting Aug. 30 — faces federal charges of wire fraud and conspiracy to commit wire fraud tied to the collapse of the blood-testing company.

Jury selection is slated to begin Aug. 31, and opening statements are scheduled for Sept. 8.

A central question at trial will be whether Holmes and her former romantic partner and co-defendant, ex-Theranos president and COO, Ramesh "Sunny" Balwani, used Theranos to intentionally defraud private investors into backing the venture, and intentionally defraud patients into purchasing unreliable blood tests.

Between 2013 and 2015, Theranos raised more than $700 million from private investors, and accepted payments from patients who purchased its blood tests offered in certain Walgreens (WBA) stores in Arizona and California.

How much due diligence was actually conducted?

"But this wasn’t, and shouldn’t have been, such 'dumb money'— it came from some very brilliant and accomplished people," Margaret O'Mara, University of Washington history professor and author of "The Code: Silicon Valley and the Remaking of America," told Yahoo Finance in a July interview.

Among Theranos' investors were some of the world's wealthiest investors and some of Silicon Valley's premier venture capital firms, some of who may testify during Holmes' trial.

Legendary investor Tim Draper, head of venture capital firm Draper Fisher Jurvetson, was one of Holmes' earliest investors. Other investors included ATA Ventures, hedge fund and investment management company Partner Fund Management, the Walton Family, the family of former U.S. education secretary Betsy DeVos, media mogul Rupert Murdoch, and Mexican business tycoon Carlos Slim.

Theranos, and other companies like WeWork, O'Mara said, reflect dark consequences that can emerge from a global financial system flush with cash, even when backing comes from influential financial and political leaders.

"I’m interested in understanding how the people who both served on Theranos’ board and invested in the company were persuaded to put their money and reputations on the line for this operation," O'Mara said. "How much due diligence was actually conducted? Was the advice of financial analysts overridden? How much was Holmes' and Balwani's deception, and how much was advisers’ and investors’ irrational exuberance?"

The former CEO and her co-defendant, Balwani, were indicted by a federal grand jury in 2018, but the trial was delayed repeatedly by the coronavirus pandemic and again by Holmes' pregnancy. In 2020, the court granted a motion for the two defendants to be tried separately.

According to prosecutors, Holmes misrepresented to investors and patients that Theranos’s proprietary analyzer known as the TSPU, Edison, or miniLab could accomplish a full range of accurate and reliable diagnostic tests using small blood samples drawn from a finger stick
.




This is going to be an interesting case, I doubt we will hear any truth from Holmes.
 

GreyCrow

TheBrownDog
Mar 21, 2016
60,602
92,989
Down South Corvus Tristis
AFL Club
Adelaide
Other Teams
Sturt, Redskins , White Sox
"I’m interested in understanding how the people who both served on Theranos’ board and invested in the company were persuaded to put their money and reputations on the line for this operation," O'Mara said. "How much due diligence was actually conducted? Was the advice of financial analysts overridden? How much was Holmes' and Balwani's deception, and how much was advisers’ and investors’ irrational exuberance?"

This is the guts of the case right here. There is fraud and there is stupidity.

Walgreens was the impetus of the company going big yet this is the gist of what they were told


According to Walgreens’ lawsuit against Theranos, at this initial meeting, Walgreens said that Holmes and Balwani made the claim that the technology was "viable and consumer-ready," and that Theranos Systems were validated under FDA guidelines. Walgreens claimed that Theranos said that the finger-stick technology would be ready to launch to consumers later that year.

Walgreens also said in that court filing that Theranos even claimed their technology had been used by the U.S military in foreign government operations.


The ' ready to launch later that year' is borderline but an understandable comment as they were pitching to get market place - the others are troublesome for them

I think they had a good idea that got away from them and its the cover up that will consume them
 

Log in to remove this ad.

JackNah_8

Hall of Famer
Jan 15, 2012
45,552
44,146
AFL Club
Richmond
I watched a documentary about E Holmes a year ago, unbelievable how many people were fooled by her. She sold a great 'fake' idea and got the right backing without any proper research or evidence.

She comes across as a narcissist. She's married to a rich heir and recently had a baby . What timing, just before a court case.
 

MSB ROYS

Premium Platinum
Apr 23, 2001
9,131
6,534
Brisbane
AFL Club
Brisbane Lions
There is an new podcast by the John Carreyrou talking about the upcoming trial and more damning stories for those interested:

As a scientist, I had to shake my head about their small scale blood sampling volume not having enough Ebola RNA copies to amplify for a viable test (Episode 2). Management didn't even allow staff to know what was happening inside the company, let alone the investors. Always undertake due diligence and question everything!
 

JackNah_8

Hall of Famer
Jan 15, 2012
45,552
44,146
AFL Club
Richmond
Thanks for sharing the podcast.

John Carreyrou:




Why do you think it was able to go unchecked for so long?
As Holmes herself has said, Theranos was in stealth mode in its first 10 years, so the company was not on anyone’s radar. It was really only in the limelight for two years before I wrote my first story on the scandal. You could argue that even that was too long because these unreliable and inaccurate blood tests were already available in Walgreens.


There is still a willingness to worship geniuses in Silicon Valley
Sunny [Ramesh Balwani, former president of Theranos, who was also charged with fraud] and Elizabeth were very secretive – they managed that company like it was the CIA. The threat of litigation was always in the air, so employees were worried about speaking out.
So she will try to push the blame onto Sunny even though she knew what was going on Theranos. I am so surprised Theranos managed to stay in business for 15yrs! Unbelievable.
 
Last edited:

Hojuman

조수미 사랑해요
May 20, 2012
15,957
45,210
Seoul
AFL Club
North Melbourne
Aussie guy from Perth does some great vids on you-tube on the Holmes's of this world - Cold Fusion.

One on Dr. Ruja and her " Onecoin " crypto worth watching.
 

Kurve

Moderator
Dec 27, 2016
16,253
34,176
AFL Club
Western Bulldogs
Once a prized member of Silicon Valley, the woman once praised as the youngest self-made billionaire has seen an incomparable fall from grace. Former Theranos CEO, Elizabeth Holmes, has shown signs of psychopathy in her endless pursuit to “democratize healthcare” through blood testing. Charged with fraud in 2018, her scheming ways and the inner working of her mind were both put out on public display for the whole world to see. From the gaze her eyes to her lack of empathy, this may be one of the biggest revelations and outings of a psychopath in recent memory. This documentary will provide a detailed look at her downfall plus which psychological studies back accusations of Holmes displaying psychopathic behavior. She truly is the con in Silicon.

 

Kurve

Moderator
Dec 27, 2016
16,253
34,176
AFL Club
Western Bulldogs
The defence:

Elizabeth Holmes, the onetime Silicon Valley superstar on trial for conspiracy and fraud, plans to argue that she was a victim of abuse. In newly unsealed court documents, Holmes’ lawyers say the CEO and founder of blood-testing startup Theranos acted at the behest of her business partner and then-boyfriend, Ramesh Balwani.
"Out of hundreds of securities fraud cases, I have never seen this defense."
In the court filings, Holmes’ legal team paints a picture in which Balwani controlled Holmes’ every move and psychologically manipulated her over the course of their 10-year relationship. The two met when Holmes was just 18 and Balwani was 37, and Balwani went on to become Theranos’ president. She claims in the court filings that he controlled what she ate, how she dressed, how much she could sleep, how much money she could spend and who she could spend time with and where. And that he monitored her phone calls, texts and emails. She accuses him of verbally disparaging her and physically abusing her, allegedly throwing “hard, sharp objects” at her.

 

JackNah_8

Hall of Famer
Jan 15, 2012
45,552
44,146
AFL Club
Richmond

(Log in to remove this ad.)

Kurve

Moderator
Dec 27, 2016
16,253
34,176
AFL Club
Western Bulldogs
latest:

I think a lot of people were a bit star struck or intimidated by her, not only was she gorgeous, she was tall and only 19 years old when she launched. Pretty impressive even if she was mostly all con.

Did you see the 60 Mins segment I think it was, where Holmes was giving a speech to a panel of scientists and an audience and one of the middle aged nobs interrupted her totally bedazzled and said 'You are simply magnificent' ... it was pathetic :sick:
 

JackNah_8

Hall of Famer
Jan 15, 2012
45,552
44,146
AFL Club
Richmond
I think a lot of people were a bit star struck or intimidated by her, not only was she gorgeous, she was tall and only 19 years old when she launched. Pretty impressive even if she was mostly all con.

Did you see the 60 Mins segment I think it was, where Holmes was giving a speech to a panel of scientists and an audience and one of the middle aged nobs interrupted her totally bedazzled and said 'You are simply magnificent' ... it was pathetic :sick:
I havent seen that segment. Awhile ago I watched Holmes documentary: The Inventor. It was crazy that experienced scientists believe every word she said, even though she had no substance or clear evidence
 

MSB ROYS

Premium Platinum
Apr 23, 2001
9,131
6,534
Brisbane
AFL Club
Brisbane Lions
If you listen to the latest Bad Blood podcast Episode 5 "Fake it 'till you make it" you will hear how she was modelled Theranos culture on programmers rather than scientists.
 

Remove this Banner Ad

Remove this Banner Ad