SAN JOSE, California — For four days, Elizabeth Holmes The blood test initiative took the stand to blame others for alleged fraud on Theranos. On the fifth day, prosecutors tried to make one thing clear: He knew.
In the cross-examination that lasted more than five hours on Tuesday, Robert Leach, the US attorney general and attorney general, cited text messages, notes and emails from Ms. Holmes and her business partner and ex-boyfriend. Ramesh Balwani – To discuss issues related to Theranos’ business and technology. Mr. Leach had a common refrain: No one hid anything from Mrs. Holmes. As CEO of Theranos, he argued that he should be blamed.
“Was everything that happened in the company your responsibility at the end of the day?” Mr Leach asked.
“That’s how I felt, too,” said Mrs. Holmes.
It was the culmination of three months’ testimony and four years of waiting ever since. Miss Holmes has been charged Prosecutors showed jurors evidence of counterfeit product promotions, forged documents and communications to show that Ms. Holmes knowingly misled investors, doctors, patients, and the world about Theranos.
The outcome of his lawsuit has implications for the tech industry at a time when fast-paced start-ups are booming. to accumulate wealth, power and cultural prestige. Few start-up founders have been prosecuted for misleading investors while trying to bring their long-term business ideas to life. Ms. Holmes, 37, who pleaded not guilty, faces up to 20 years in prison if found guilty.
Theranos was valued at $9 billion in 2015, raising $945 million on Mrs. Holmes’ promise that her blood testing machines could perform hundreds of tests quickly and inexpensively using just a few drops of blood. He founded the company in 2003 after leaving Stanford University.
In reality, however, prosecutors argued that Theranos’ machines were only able to run a dozen tests, and they were unreliable. Instead, he secretly used Siemens’ commercially available machines. After this and other misrepresentations were exposed, Theranos canceled two years of blood test results. It has also settled lawsuits with investors and the Securities and Exchange Commission. Solving in 2018.
In her first statement, Ms. Holmes tried to dismiss the fraud charges as too simplistic and a misunderstanding of her statements. He also cited his ignorance of many of Theranos’ problems, highlighting his lack of experience and qualifications to run a scientific laboratory.
Cross-examined on Tuesday, Ms. Holmes admitted she had made a mistake. “There are a lot of things I wish I had done differently,” he said.
Theranos mismanaged 2015 Disclosure in The Wall Street Journal about problems with the company’s technology, he said.
“We totally screwed it up,” said Ms. Holmes. He also admitted that he reached out to Rupert Murdoch, owner of The Journal, which invests in Theranos, to spoil the story.
Ms. Holmes said she also regretted the way Theranos had treated an employee, Erika Cheung. increase anxiety about the company’s laboratory practices. After Ms. Cheung left the company, Theranos hired a private detective to track her down and serve her with a legal threat.
“I wish we had treated him differently and listened to him,” said Mrs. Holmes.
The testimony came after the striking statements about Ms. Holmes’ relationship with Mr. Balwani. On Monday, she tearfully said she was raped as a student at Stanford and that Mr Balwani abused her emotionally and physically after the experience.
He accused Mr. Balwani, who is 20 years older than him, of controlling what he eats, how he presents himself, and how much time he spends with his family. She said she forced him to have sex with her against her will and that she had to “kill herself” to be reborn as a successful entrepreneur.
For the first time, Ms. Holmes told herself the story of the rise and fall of Theranos, which has appeared in podcasts, documentaries and screenplay series. Silicon Valley’s tale of arrogance and revenge. His testimony has complicated this narrative and shed new light on the behind-the-scenes relationship between him and Mr. Balwani, which they kept secret as his profile rose.
Ms. Holmes tried to connect her relationship with Mr Balwani to fraud charges, stating that it influenced “everything about who I am”, including Theranos. He said Theranos fired him from the company and broke up with him after learning that there were major problems with his lab, which Mr. Balwani oversees.
“There was no way he would have saved our company if he had been there,” he said on Tuesday.
Mr. Balwani denied the assault charges. He was charged with fraud charges along with Ms. Holmes and will be tried separately next year. He also pleaded not guilty.
Mr. Leach lingered over the relationship during a long and detailed day of testimony, using text messages between Ms. Holmes and Mr. Balwani as his primary evidence. He asked Ms. Holmes to read the text messages showing the exchange of loving words with Mr. Balwani. The couple called each other “tiger” and “tiger” in between pep talks about building Theranos.
“No one else can start this business but you and me,” Mr. Balwani wrote in an exchange.
After each, Mr. Leach asked Ms. Holmes to confirm that she had read an example of Mr. Balwani treating her with love. Reading the messages, Ms. Holmes wept for the second time on the podium.
Jill Hasday, a professor at the University of Minnesota Law School who has written a book on intimate partner violence and the law, said the prosecution’s tactic could work to undermine Ms. Holmes’ earlier testimony, depending on the jurors’ understanding of abuse.
“My instincts are that it can be effective because people misunderstand so much about intimate partner violence that, among other things, it happens all the time,” Ms Hasday said.
The trial, which was scheduled to end in December, will continue next week.
Erin Woo contributing reporting.