Elizabeth Holmes used her charm, composure, and a sprinkling of scientific jargon to convince investors to invest over $1 billion in her blood testing start-up, Theranos. Theranos is now valued at about $2 billion. All of it came tumbling down in 2018, when it was found that the company’s technology and business practises had serious flaws.
On Tuesday, Ms. Holmes attempted to persuade a jury that she was not guilty of fraud by using the same strategies she had used before.
For the third day in a row, Ms. Holmes took the stand in her own defence and gave her most compelling arguments in opposition to the 11 charges of fraud against her that have been levelled against her by prosecutors. In her closing argument, she made direct eye contact with jurors and inclined her head to the side, arguing that she could not have intended to mislead anybody about the technology used by Theranos.
She alternated between offering authoritative accounts of Theranos’ scientific studies and portraying herself as a naive and ambitious entrepreneur who felt her company’s technology worked. Ms. Holmes is 37 years old. She attempted to recast previous instances as misinterpretations of her motives and intentions. According to her, her board of directors should have provided her with more sound advice. She expressed concern that she had placed too much faith in the physicians, scientists, and engineers who worked at Theranos in the past.
And she portrayed herself as an entrepreneur who was sincerely concerned — maybe excessively so — about safeguarding her company’s reputation and financial future, to the extent that she took actions that were ultimately characterised as fraudulent by the prosecution and the media.
A major goal of the defence throughout the entire day of testimony was to raise doubts in jurors’ minds about the prosecution’s case: that Ms. Holmes had purposefully claimed Theranos could revolutionise health care despite knowing the company’s technology was lacking. The defence succeeded in this goal. Defendants in white-collar criminal cases are often extremely sophisticated and intricate, and it is the responsibility of the prosecution to demonstrate that the defendant meant to defraud.
Mr. Spektor said that the government’s strongest evidence concerning Ms. Holmes’s intentions is circumstantial in nature, derived from documents and the testimony of other witnesses. Ms. Holmes, on the other hand, could testify directly about what she knew and planned, according to him.
It is important to remember that the high-profile trial serves as a cautionary storey for Silicon Valley start-ups, which often embrace the same type of hustle, ambition, and change-the-world idealism that catapulted Ms. Holmes to the upper echelons of the business in the first place. Despite the tech industry’s dependence on hype, just a few of executives have been arrested on accusations of defrauding investors, making Theranos an exception in the field of corporate fraud.
However, as digital start-ups continue to raise record-breaking quantities of money, several basic methods of governance and scrutiny, according to investors and entrepreneurs, have been thrown out the window. A conviction and jail sentence for Ms. Holmes may put a cloud over the good times, instilling a new sense of caution among the carefree founders, if the verdict is handed down.
On Tuesday, Ms. Holmes started her exhausting day of testimony at 9 a.m. and remained on the witness stand throughout the whole day. She drove home a central topic of her case throughout the proceedings: that she felt Theranos’ technology was effective. It was proven to the jury that numerous scientists and physicians who worked in the company’s lab had sent emails to the company’s executives touting successful research, trials, and other advances.
During her deposition, Ms. Holmes said that Channing Robertson, a Stanford University professor who joined Theranos’ board of directors, assured her that her ideas were “extremely promising.” Among the emails sent to Ms. Holmes concerning Theranos’ tests by Ian Gibbons, Theranos’ head scientist, was one that stated: “Our immunoassays are on par with the finest that can be done in clinical laboratories.”
In a concession to one of the most important pieces of evidence in the prosecution’s case, Ms. Holmes testified that she had personally placed the logos of pharmaceutical firms to Theranos’s validation reports without the businesses’ approval. Those papers recorded examinations of Theranos’s blood tests that were conducted in collaboration with pharmaceutical firms, and they were essential in convincing investors and partners that the start-up was the genuine article.
At an early stage of the trial, representatives from the pharmaceutical corporations Pfizer and Schering-Plough said that their businesses had neither authored or authorised the papers in question. However, Ms. Holmes sent the reports, which included their logos, to investors and partners as part of her pitch to persuade them to invest in and do business with Theranos, according to the company.