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Elizabeth Holmes fraud trial: What to expect in the case against the ex-Theranos CEO
Alexis Keenan
·Reporter
This is going to be an interesting case, I doubt we will hear any truth from Holmes.
Alexis Keenan
·Reporter
.One of Silicon Valley’s most infamous entrepreneurs, Elizabeth Holmes, is scheduled to stand trial on Aug. 31 to defend accusations that she used her biotech startup, Theranos, to commit criminal fraud.
Holmes, 37, once proclaimed the youngest female self-made billionaire — and featured in Yahoo Finance’s new documentary "Valley of Hype," streaming on Yahoo Finance starting Aug. 30 — faces federal charges of wire fraud and conspiracy to commit wire fraud tied to the collapse of the blood-testing company.
Jury selection is slated to begin Aug. 31, and opening statements are scheduled for Sept. 8.
A central question at trial will be whether Holmes and her former romantic partner and co-defendant, ex-Theranos president and COO, Ramesh "Sunny" Balwani, used Theranos to intentionally defraud private investors into backing the venture, and intentionally defraud patients into purchasing unreliable blood tests.
Between 2013 and 2015, Theranos raised more than $700 million from private investors, and accepted payments from patients who purchased its blood tests offered in certain Walgreens (WBA) stores in Arizona and California.
How much due diligence was actually conducted?
"But this wasn’t, and shouldn’t have been, such 'dumb money'— it came from some very brilliant and accomplished people," Margaret O'Mara, University of Washington history professor and author of "The Code: Silicon Valley and the Remaking of America," told Yahoo Finance in a July interview.
Among Theranos' investors were some of the world's wealthiest investors and some of Silicon Valley's premier venture capital firms, some of who may testify during Holmes' trial.
Legendary investor Tim Draper, head of venture capital firm Draper Fisher Jurvetson, was one of Holmes' earliest investors. Other investors included ATA Ventures, hedge fund and investment management company Partner Fund Management, the Walton Family, the family of former U.S. education secretary Betsy DeVos, media mogul Rupert Murdoch, and Mexican business tycoon Carlos Slim.
Theranos, and other companies like WeWork, O'Mara said, reflect dark consequences that can emerge from a global financial system flush with cash, even when backing comes from influential financial and political leaders.
"I’m interested in understanding how the people who both served on Theranos’ board and invested in the company were persuaded to put their money and reputations on the line for this operation," O'Mara said. "How much due diligence was actually conducted? Was the advice of financial analysts overridden? How much was Holmes' and Balwani's deception, and how much was advisers’ and investors’ irrational exuberance?"
The former CEO and her co-defendant, Balwani, were indicted by a federal grand jury in 2018, but the trial was delayed repeatedly by the coronavirus pandemic and again by Holmes' pregnancy. In 2020, the court granted a motion for the two defendants to be tried separately.
According to prosecutors, Holmes misrepresented to investors and patients that Theranos’s proprietary analyzer known as the TSPU, Edison, or miniLab could accomplish a full range of accurate and reliable diagnostic tests using small blood samples drawn from a finger stick
Elizabeth Holmes fraud trial: What to expect in the case against the ex-Theranos CEO
One of Silicon Valley’s most infamous entrepreneurs, Elizabeth Holmes, is scheduled to stand trial in San Jose, California starting September 7 to defend federal criminal accusations that she used her biotech startup, Theranos, to commit financial fraud. Holmes, 37, once proclaimed the youngest...
finance.yahoo.com
This is going to be an interesting case, I doubt we will hear any truth from Holmes.