For about four months, a total of 29 witnesses were called to the stands as they outlined the shortcomings of Holmes at the helm of affairs of Theranos over a span of 15 years.
Theranos founder and former Chief Executive Officer Elizabeth Holmes has been found guilty by a jury of 8 men and 4 women in the long-drawn case over her lies to investors and clients about her innovative blood-testing technology. Holmes was found guilty on four of the 11 charges, acquitted of 4 and the jury said they were unable to reach verdicts on three.
The jury found Holmes to be guilty of conspiracy to defraud investors, and on three counts of wire fraud against investors, a position the jurors agreed on after more than 50 hours of deliberations over a period of 7 days. According to reports from The Guardian, the Theranos founder bowed her head, remained seated, and expressed no visible emotion while the decisions were being read. Her partner, Billy Evans, showed agitation in earlier moments but appeared calm during the verdict reading.
Amongst those allegedly defrauded by Elizabeth Holmes according to a CNBC report include San Francisco-based healthcare hedge fund, PFM Healthcare Master Fund with an amount estimated at around $38 million. Others include Lakeshore Capital Management, a fund connected to the DeVos family, of almost $100 million; and Mosley Family Holdings, an LLC associated with former estate attorney Daniel Mosley, of close to $6 million.
For about four months, a total of 29 witnesses were called to the stands as they outlined the shortcomings of Holmes at the helm of affairs of Theranos over a span of 15 years. While the company went defunct in 2018, Holmes’s trial had lingered on until now.
The Genesis of Theranos and Elizabeth Holmes Saga
Theranos was founded as a promising medical startup that promises a revolutionary way of testing blood from just a simple drop or a small proportion of the sample. Holmes founded the company when she was 19, after dropping out of Stanford, and she quickly gained recognition for her works and many even called her the next Steve Jobs.
While Holmes was notably proud of her technology, things fell apart in-house, long before the public knew about it. As reported, Holmes allegedly ignored warning signs that the technology was not working as projected. These warnings came from her employees, some of whom stood as witnesses in the trial.
Despite these warnings, Holmes sold the technology to investors, two of which were former US Secretaries of State, George Shultz, and Henry Kissinger. At its prime, Theranos was valued at over $9 billion. The position of the prosecutors was that Holmes lied to investors about the workability and efficacy of the blood testing technology when indeed, it didn’t work.
Holmes ran the business alongside her boyfriend, Ramesh “Sunny” Balwani who served as the Chief Operating Officer of the company for 10 years. The defense lawyers argued the missteps of Holmes to be influenced by the abuses she suffered from Balwani who controlled virtually every aspect of her life under the guise of wanting to turn her into a successful CEO.
While the prosecutors uncovered a series of romantic messages between the duo which negated the abuse claims within the period under review, Holmes and her lawyers maintained the stance that all was due to the Balwani control. Balwani is also facing an SEC-indicted trial this year. The in-house wrongs of Theranos were uncovered by Wall Street Journal reporter, John Carreyrou, in 2015, and the case has lingered on since then.
After the verdict by the jury was read, Elizabeth Holmes went to hug her family members, including her boyfriend, before following her lawyers. Holmes is free on bonds for now until the judge, Edward Davila, decides on the day the judgment will be pronounced, as the likely sentence can see the Theranos queen locked up for 20 years.