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What we’ve learned so far from Elizabeth Holmes’ testimony



But over the course of two days this week, and a brief appearance the week before, Holmes took up the position approximately. nine hours before a room full of San Jose crowds. He stated about the origin of Theranos, the evolution of his blood test devices and the positive comments he said he had received along the way.

Holmes admitted some of the prosecution’s most serious allegations while offering alternative explanations. At times, he showed some contrition. But throughout his testimony, he tried to sow doubt that he had any intention of cheating, a key part of what federal prosecutors are trying to prove. He also diverted responsibility to others by simply naming who held certain roles in the company.

“The defense can benefit if it can undermine the narrative of the government that Holmes knew about and directed the alleged fraud at Theranos,” Brooklyn Law School professor Miriam Baer told CNN Business.

For 37-year-old Holmes, the stakes can’t be higher. Holmes faces 11 charges of criminal fraud on charges of knowingly misleading investors, patients and doctors about Theranos ’abilities to make financial gains. Holmes, who has pleaded not guilty, faces up to 20 years in prison and a $ 250,000 fine, plus restitution, for each electronic fraud charge and each conspiracy count.

Holmes, who dropped out of Stanford University, founded Theranos at age 19 with the high mission of revolutionizing blood testing and spent a decade working under the radar in his quest to do so. In 2013, the company claimed to have developed a revolutionary blood test technology that could accurately, reliably and efficiently perform a series of tests using just a few drops of blood.

Holmes was hailed as a notable success story. She was praised on the covers of magazines as the richest self-made woman and “the next Steve Jobs.” It raised $ 945 million from investors, once it valued the start-up at $ 9 billion. Then, it all started to fall apart when a Wall Street Journal journalist started making holes in the company’s claims.

Holmes is scheduled to testify again next week when the court returns to session on Monday, Nov. 29 at 10 a.m. local time. When her lawyer finishes questioning her, it will be the turn of the prosecution. This is what we have learned so far from his time on the podium.

Holmes personally added pharmaceutical logos to reports that investors claimed to have deceived them

In one of the most startling moments of his testimony to date, Holmes admitted that he was the person who put the logos of the pharmaceutical companies Pfizer and Schering-Plow on the reports Theranos prepared before circulating them.

Numerous investors and business partners have stated that they believed the reports were from pharmaceutical companies and have indicated that they have supported Theranos technology.

During his case, the government had tried and failed to specify who in Theranos had added the logos to the reports. But on Tuesday, Holmes’ attorney, Kevin Downey, asked him in his unpublished question: “Who added the logos of these companies to the top of these documents?” Holmes declared, “I did.”

“This work was done in collaboration with these companies, and I was trying to convey that,” Holmes said. He acknowledged that he had heard previous testimonies from witnesses who believed the reports were from pharmaceutical companies. “I wish I had done it differently,” he stated.

Elizabeth Holmes, founder of Theranos Inc., arrives at the federal court in San Jose, California, USA, on Monday, November 22, 2021.

Holmes acknowledges the use of modified third-party devices

Holmes also confirmed that the company used commercially sold laboratory equipment to test patient samples and testified that Theranos withheld this information from many people, including at least one major retail partner.

While eyewitness accounts suggested that Theranos relied on third-party machines because of its technological flaws, Holmes portrayed the decision as a response to accommodating a key business partnership with Walgreens.

The retailer, he said, had decided not to bring Theranos devices to its stores until the startup received regulatory approval. Theranos “agreed to do what Walgreens wanted,” he testified, and set up a central lab.

The trial of Elizabeth Holmes: journalist who helped 'lift the spotlight' Theranos CEO testifies

But Holmes said that at one point, it became impractical that her proprietary devices, which she said were meant to be operated on by “a layman or a store technician,” and process a sample at a time. , perform tests in a central laboratory. For this reason, he said, Theranos “made inventions” in commercial lab equipment, altering them to process small amounts of blood.

That The combination, Holmes testified, was considered a “trade secret.” As a result, Theranos did not tell many about its reliance on these machines, including Walgreens.

Holmes set the decision to withhold information from his company’s lawyers. “This was an invention that we understood from our lawyer that we had to protect as a trade secret,” he said. “Large medical device companies like Siemens could easily replicate what we had done if they knew what we were doing … And so the advice was to keep it confidential so that Theranos would have a chance to take advantage of this invention. “.

Holmes stated that Theranos disclosed its use of third-party devices to the U.S. Food and Drug Administration, as well as board members. However, one of the members of his high-profile board, former Secretary of Defense James Mattis, testified earlier in the trial that he did not recall that detail. going up.

Holmes mentions a key name for the first time

After two days at the witness bar, Holmes finally mentioned the name “Sunny Balwani,” her ex-boyfriend who served as Theranos’ chief operating officer. Prior to the start of the trial, court documents indicated he could testify that he was the victim of a decade of a relationship of psychological, emotional and sexual abuse with Balwani. These allegations, which Balwani’s lawyers have denied, are intended to speak to his mood at the time of the alleged fraud.

So far, Holmes has not testified at all about the personal nature of their relationship.

His first mention of him was as someone who was involved in the company’s negotiations with Walgreens. He then mentioned it several more times, including being responsible for financial documents and projections. One of the ways the government has alleged that Theranos has deceived investors was through false and misleading financial statements and models.

Balwani will face the same charges as Holmes when his trial begins next year. He has also pleaded not guilty.

The charm and charisma of Holmes in the show

For the first time, jurors were able to see Holmes ’charisma, which helped convince investors, retail executives, and talent to bet on the company.

Holmes, unmasked and with his head slightly tilted, maintained strong eye contact with his lawyer as he questioned her. She answered her questions confidently and deliberately. At times, she offered a small laugh, a smile, and even some information that could serve to humanize her to the jury. Asked on Tuesday, for example, if she knew the date on which she would close a particular investment, she stated, “Yes I know because it was my birthday. February 3 of that year.”

At scheduled breaks, Holmes could be seen hugging friends and family. His mother, Noel, has been a constant in court since the start of the trial. His partner, Billy Evans, also attends frequently. A small group of other unidentified people, who are apparent friends or family, have also been in the room to witness their testimony.