In a California court, the trial of Theranos founder Elizabeth Holmes boiled down to two conflicting arguments: did she lie and deceive to make money as the prosecutors said, or did she simply fail to achieve the ambition to reinvent blood testing? Vision?
Juror Listen to the opening debate In a trial that could last several months on Wednesday, dozens of witnesses were involved and tested the limits of Silicon Valley’s boosterism.
The proceedings attracted a large group of interested observers-including three women in all-black suits that seemed to mimic Sherlock Holmes’s iconic style.
Holmes was charged with wire fraud and conspiracy to commit wire fraud, suspected of defrauding investors and patients by making false statements about Theranos’ blood tests and finances. She has pleaded not guilty. If convicted, she will face up to 20 years in prison.
The trial will resume on Friday, and legal analysts said it may boil down to a notoriously tricky concept: the mentality of the founder of Theranos and whether she Believe her own hype, Although there is evidence to the contrary.
Jessica Roth, a professor at the Cardoso School of Law at Yeshiva University in New York, said: “This is one of the most difficult things the legal system has to deal with because there is really no way to read someone’s thoughts.” Former federal prosecutor.
The prosecutor listed five types of “misleading statements” that Holmes allegedly promoted: those related to Theranos’ proprietary testing equipment; its military contracts; pharmaceutical work; financial health; and its Cooperation with Walgreens, American Pharmacy Group.
Prosecutors cited a series of supporting examples in an attempt to portray Holmes as repeatedly lying about the state of her business, enabling her to successfully raise hundreds of millions of dollars and to be called the world’s youngest female self-made billionaire.
“The defendant’s false and misleading statements were very successful,” said Assistant U.S. Attorney Robert Ritchie.
The prosecutor said that on one occasion, Holmes submitted a forged reputation report to investors, allegedly representing the company’s cooperation with Pfizer.
“As you will hear, Pfizer did not write this article. Pfizer did not affix its logo on it. Pfizer did not allow its logo to be placed on it,” Leach said, adding that the pharmaceutical company actually concluded Reached the opposite conclusion.
Dangerous financial situation
Theranos’ financial distress became a recurring theme in the prosecution’s argument.
Leach stated in his opening remarks that sometime in 2013, due to the reduction of the cash balance to 15 million U.S. dollars, Theranos’ weekly salary reached 1 million to 2 U.S. dollars at one time, and the company’s scientists issued a statement on the reliability of its proprietary technology. warn.
“Due to time and money, the defendant decided to mislead,” Leach said.
The prosecution’s first witness, So Han Spivey, the former financial director of Theranos, testified that as early as 2009, the company began to selectively pay different suppliers.
Spivey also testified that KPMG, Theranos’ external auditor, declined to comment on the company’s 2010-15 financial statements. KPMG did not immediately respond to a request for comment.
Prosecutors provided some clues about their witness strategies, while largely avoiding mentioning the big names scattered on the extensive list of people who can be called to testify.
one of A series of Theranos investorsRich summoned two people: Lisa Peterson, a company executive who manages funds for the DeVos family, and Brian Grossman, who helped hedge fund Partner Fund Management invest.
Previous PFM Prosecute Theranos called it “a series of lies.” The case was settled in 2017.
The prosecutor told the jurors that they would listen to the opinions of employees and “outsiders,” including representatives of healthcare companies that have worked with Theranos.
One of the prosecution’s most important witnesses, Adam Rosendorff, the former director of Theranos laboratory, also occupies a prominent position in the defense team’s arguments, trying to show that Holmes relied on her scientific experts to validate the company’s tests.
“Failure is not a crime”
Sherlock Holmes’ lawyers tried to portray her as an ambitious and serious entrepreneur, but failed to deliver on their lofty promises.
Defense attorney Lance Wade described Holmes’s last time out of Theranos office in 2018, “Her last day dedicated to a dream. She spent nearly half of her life, her adult life, pursuing this dream.”
Wade emphasized that Holmes believed in her company’s promise, but Failure does not constitute a crime.
“The evidence will tell you that she has tried her best day after day to make Theranos succeed, and she really believes it will succeed,” he said.
Respond to Fraud allegations, The defense team argued that investors are aware of the company’s risks and limitations.
“They are eager to invest in a technology company, and they believe that the risk will not exceed the profit potential,” Wade said.
He tried to portray Errors in Theranos test As is typical, despite arguing with Holmes, based on the work of her own clinical team, Holmes believes that these tests are accurate and reliable.
Wealth on paper
The defense also argued that Holmes did not actually get rich from Theranos.
Wade admitted that Holmes owns about half of Theranos and gave her billions of dollars worth of shares at the peak of the company, when investors valued it at $9 billion.
But Holmes never seized the opportunity to turn her paper wealth into real dollars by selling stocks. “She gave up every opportunity to sell,” he said.