Why Elizabeth Holmes is in court
Holmes’ defense isn’t an outright denial of the charges pressed against her, but instead, one that attempts to mitigate some of her culpability. This includes allusions to her poor mental health, media sexism, and allegations of emotional abuse at the hands of her ex-boyfriend and former Theranos Chief Operating Officer, Ramesh Balwani.
The prosecution aims to rely on clinical data and a stable of powerful potential witnesses to demonstrate Holmes’s knowing attempt to grift more than $700 million from venture capitalists and private investors.
U.S District Judge Edward J. Davila denied a motion by Holmes’s defense team to suppress evidence of customer complaints and their test results in her criminal trial. The ruling permits prosecutors to put patients on the witness stand.
The yet-to-be-determined verdict in the U.S. v. Holmes case could have an impact on the Silicon Valley cult of personality pitch, canonized by the late Steve Jobs and further championed by magnates like Elon Musk.
“Essentially, her technology was supposed to revolutionize health care: automatically performing hundreds of blood tests on a couple of drops of blood in just a few minutes,” Dr. Sunny Bains wrote in a piece published in Oxford University Press.
“In reality, it was no more carefully thought out than an undergraduate research project. She lied to her staff, lied to her investors, lied to her board, and lied to her company’s potential customers.”
If found guilty, Holmes may end up being the reason why the
prevaricating, idealistic, college dropout loses its status as a good omen in the tech world and becomes a red flag instead.
Opening statements are set to begin next week
Holmes’ defense attorneys, federal prosecutors, and Judge Davila questioned over 80 potential jurors to gauge their awareness of Holmes’ celebrity as well as to find out if they had any intimate connections with victims of domestic violence.
Prosecutors claim that Holmes supported her celebrity status, lavish shopping sprees, a private jet, and a staff of errand runners with the profits made from Theranos’ brief but highly publicized run.
The defense actually made attempts to block testimony chronicling Holmes’ lifestyle from entering her criminal trial earlier this year.
“The amount of money Ms. Holmes earned in her position at Theranos, how she chose to spend that money, and the identities of people with whom she associated simply have no relevance to Ms. Holmes’ guilt or innocence,” they wrote in a filing.
“Many CEOs live in luxurious housing, buy expensive vehicle and clothing, travel luxuriously, and associate with famous people — as the government claims Ms. Holmes did. The jury should not be subjected to arguments regarding Ms. Holmes’ alleged purchase of luxury travel, ‘fine wine,’ or ‘food delivery to her home.”
However, many of the jurors questioned were very familiar with Holmes’ status and even if they weren’t, her wealth and public persona are important elements to the prosecution’s two-pronged case: Holmes relied on a manufactured self-image to defraud investors, which in turn put patients who received falsified test results at risk.
Holmes says she suffered decade long abuse
Unsealed documents suggest Holmes plans on testifying against Balwani with a history of emotional abuse that erased “her capacity to make decisions.”
“Ms. Holmes plans to introduce evidence that Mr. Balwani verbally disparaged her and withdrew ‘affection if she displeased him’; controlled what she ate, how she dressed, how much money she could spend, who she could interact with — essentially dominating her and erasing her capacity to make decisions,” an unsealed Balwani filing from February said of Holmes’ strategy.
Balwani successfully motioned to stand trial independently of Holmes. If found guilty, Balwani could face up to 20 years in prison.
Holmes’ defense additionally alleges that Balwani monitored her calls, texts and email messages, threw “hard, sharp objects” at her, and restricted her sleep and monitored her movements.
Visionaries v. ideas
Holmes dropped out of Stanford University at the age of 19 to found Theranos, a bio-tech company that was supposed to democratize health care. The company would go on to reach a peak valuation of $10 billion between 2013 and 2014.
Holmes was the subject of a media frenzy during this time, that was quick to name her as Jobs’ successor in influence and wealth.
Michael Siconolfi, an editor at the Washington Post, had observed that Holmes seemed unable to convey the efficacy of Theranos’ novel blood testing device, called The Edison, during her many press conferences and media releases.
“I saw a number of magazine covers featuring Elizabeth Holmes with these provocative headlines, like ‘out for blood’ and that they discussed ways in which she was going to revolutionize the blood-testing industry,” Siconolfi recalled on an episode of The Wall Street’s Journal Podcast.
“John Carreyrou, who reported to me at the time, came to me with a tip that he’d gotten basically saying that the proprietary technology didn’t work and that they were lying to regulators and all kinds of problems. And so John just started digging into it. “
Holmes attempted to stop Carreyrou from publishing with legal and financial threats to little effect.
Internal trial data revealed that the Edison had a failure rate of 51.3%, making the tests completely worthless to patients.
The surplus of investors and high-profile political figures, including former Secretary of Defense James Mattis, was reacting to a pitch that had not been realized at any stage of development.
Moreover, Holmes allegedly relied on an affected persona; complete with the all-black turtle-neck getup, slogans about changing the world and even a feigned baritone voice, to sell a medical device that did not work.
This may be one of the reasons why Holmes’ trial has been gaining so much attention.
The visionary orator has become a trope in the tech world. Just last week, Elon Musk was able to pontificate about a hypothetical robot that will do everything from fetch your mail to DJ your cocktail party.
At a demonstration with corny sci-fi guitars, and lasers, a man in a robo-body suit was meant to be an advertisement of what’s to come.
But Holmes’ case may be a referendum on displays like these — and could offer closure for people who suffered from the company’s misinformation.
“Patients who were wrongly diagnosed by Theranos tests are set to testify against Holmes. Some had been told they were HIV-positive. Another, who was pregnant at the time, was incorrectly told she had miscarried her baby,” NPR reports.
“Holmes’ legal team is expected to cast the story in a different light, arguing that while Holmes may have exaggerated her company’s achievements, she never intended to mislead patients and investors. “
If Holmes is found guilty, she could face up to 20 years in prison.
Read more about Elizabeth Holmes here.