Holmes’ fate hangs in the balance as the jury weighs charges of criminal fraud

Theranos founder and former CEO Elizabeth Holmes leaves the Robert F. Peckham Federal Building in San Jose, California, on December 17, 2021.
Enlarge / Theranos founder and former CEO Elizabeth Holmes leaves the Robert F. Peckham Federal Building in San Jose, California, on December 17, 2021.

Justin Sullivan / Getty Images

Who is responsible for the downfall of Theranos, the ill-fated blood test startup that succeeded in 2018, and is it a scam? That’s the question before 12 people today in San Jose, California, who will decide the fate of Elizabeth Holmes, founder and former CEO of the startup.

The jurors spent the last two days of last week hearing closing arguments from prosecutors and defense attorneys. The latter says nearly everyone but Holmes is responsible for one of the biggest failures of a startup in recent history, while the former says Holmes is responsible for what happened.

Holmes is faced with a choice

“She chose to be dishonest,” assistant US attorney Jeffrey Schenk told jury in its closing argument. There were at least three decision points, three withdrawals, that Holmes could have chosen to let Theranos “slowly disappear”. Instead, she selected “Go down the deceptive path.”

At the time of the alleged fraud, which lasted from 2013–2015, according to indictment, Holmes is anything but naive, Schenk speak. She knew exactly what she was doing. “The truth is that at the time investors invested in 2013 and 2014, she was almost 30 years old and had been CEO for almost a decade.”

Holmes, Schenk said, oversaw countless parts of the company, from public relations to legal, business development, legal affairs, and so on. , he said she had made many false claims – that Theranos’ devices were better than they really were, that they were being used on the battlefield, that they had been endorsed by pharmaceutical companies products and the company is financially stable.

Every Holmes investor accepted one of her false claims, says Schenk. The The DeVos . family Love the fact that Theranos uses smaller blood samples. Chris Lucas love the use of automation. Texas investor Alan Eisenman, whose colorful antics Courtroom lighting, intrigued by Theranos’ supposed accuracy.

Schenk also attacked Holmes’ claims that trade secrets prevented her from disclosing the truth that could lead investors to pour their money elsewhere. Holmes’ desire to protect Theranos’ trade secrets did not “allow her to make false statements,” he said. speak.

Schenk ended his argument by saying to the elephant in the room: Holmes’ abuse allegations by her ex-boyfriend and former COO Theranos Ramesh “Sunny” Balwani. (Balwani has denied her claims.) If a juror decides she’s guilty of fraud, that’s not the same as saying, “We, the jury, don’t believe her abusive claims.” , Schenk speak. On the other hand, if they To speak she is not guilty, “your judgment does not validate her claims of abuse. You do not have to decide whether the abuse occurred”.

Defense blames everyone but Holmes

One of the first things Holmes’ attorney, Kevin Downey, did was remind jurors what “beyond a reasonable doubt” meant. Then he began to try to instill that suspicion in their minds.

He said that Holmes did not intend to commit a crime, that she was transparent in some of her dealings. Finally, she told the FDA that her company was using a third-party machine and she was willing send in one of their proprietary devices to Johns Hopkins scientists, who say the startup’s technology is “novel and sound.”

Downey also tried to blame others for Theranos’ failure and alleged fraud. Investors are either too lazy or oblivious to seek out public data that can address the concerns they raise in their testimony. Scientists, especially former laboratory director Adam Rosendorff, should share responsibility as he approved many patient tests performed on proprietary Theranos devices. Laboratories, Downey speak, “Not Miss Holmes’s responsibility.”

Journalists were also a party to Theranos’s failure, as they cited people who said good things about Holmes and the company. (Perhaps that is to suggest that Holmes used media reports – which she manipulated through selective disclosure – as a kind of moral compass to tell her whether Is she on the right track?)

And last but not least, Downey reminded the jury that Holmes tried to turn the tide in 2016, alluding to but not explicitly mentioning Balwani’s departure from the company and Holmes’ romantic life. .

“Are those the actions of someone who participated in a conspiracy to defraud people?” Downey concluded.

After concluding the arguments, Judge Edward Davila read the jury nearly 40 pages of instructions. Today, jurors are scheduled to return to court for deliberations.

https://arstechnica.com/tech-policy/2021/12/holmes-fate-hangs-in-the-balance-as-jury-deliberates-criminal-fraud-charges/ Holmes’ fate hangs in the balance as the jury weighs charges of criminal fraud

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