This week began the trial of one of the most controversial entrepreneurs. Elizabeth Holmes , founder of the blood test biotech startup Theranos will face 16 jurors to prove her innocence on various charges of investor and patient fraud.
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Three years after an investigation by The Wall Street Journal uncovered irregularities in his company’s testing, Holmes and his former business and sentimental partner, Ramesh “Sunny” Balwani, will face trial on multiple counts of wire fraud and conspiracy to commit wire fraud. Both have pleaded not guilty.
The trial will be held in San José, California. Holmes faces 10 counts of wire fraud and two counts of conspiracy amid allegations of misleading investors, patients and the general public with promises of a revolutionary blood testing technology that was established to disrupt the entire healthcare industry, a once valued at $ 9 billion.
The 12-member jury was sworn in on Wednesday morning, and opening statements began shortly after 1 p.m. EST.
Robert Leach, who opened the indictment on behalf of the US government, began by saying that Holmes’ trial is “about fraud, about lying and cheating to get money.”
“The plan brought him fame, it brought him honor and it brought him adoration,” he said. “She had become, as she wanted, one of the most celebrated CEOs in Silicon Valley and the world. But under the façade of Theranos’ success, major problems were brewing.”
From being the richest self-made billionaire to being worth $ 0
The biotech firm Theranos was a unicorn, that is, a company that had achieved great growth and profits in a relatively short time (like Uber). The Palo Alto, California company developed a wearable device called the Edison that did blood tests with just a finger prick. This technology, which promised full batteries of studies without having to obtain intravenous tubes of blood, led founder Elizabeth Holmes to raise $ 400 million from investors, valuing the company at $ 900 billion.
Photo: Jeff Chiu / AP
Author Steve Tobak called the Theranos founder “The Worst Entrepreneur of 2015.” How did what seemed like a great success story go wrong?
Holmes’s story has all the elements of a Hollywood movie (in fact, Jennifer Lawrence is going to play it ). At age 19, the entrepreneur dropped out of Stanford University to revolutionize the laboratory diagnostics industry (worth more than $ 76 billion) with a low-cost device that would deliver real-time results to consumers.
That was 2003. A decade later, his Theranos company had partnerships with Walgreens pharmacies and had amassed several million known investors. Meanwhile, Holmes was on the cover of many magazines, shows and business websites, from Fortune to Business Essweek , where she was recognized as the billionaire role model of the new generation.
But in February 2015 things started to change. John Ionnidis, a professor at Stanford University School of Medicine, wrote a letter to the American Medical Association accusing Theranos of using press attention to create excitement in the public and not undergo community scrutiny. medical, typical process for any biomedical innovation.
In October of that year the controversy began to follow Theranos when The Wall Street Journal questioned the effectiveness and accuracy of the Edison apparatus, saying that it exaggerated its services. The article by two-time Pulitzer Prize winner John Carreyrou destroyed the credibility of the company, which responded by saying that Edison could identify up to 240 health disorders, all with a single picket. Edison can actually only process 15 types of tests.
Then the dam of skepticism overflowed and people began to question the quality and ethics of Theranos. Several investigations emerged showing that much of Edison’s tests were wrong and that Theranos labs failed safety and hygiene tests. As the company had never applied for a sanitary license from the Food and Drug Administration ( FDA ), the agency decided to pay them a surprise visit.
Theranos went crazy trying to improve his methodology to please the hygiene department, but his efforts weren’t enough. The US government withdrew the few certifications it had and banned its CEO, Elizabeth Holmes, from operating laboratories for at least two years.
What does this all mean? That Theranos did blood tests on thousands of people before they had proper technology. Overvaluing the virtues of a product is not so serious when it comes to a vacuum cleaner or an iron, but when the result can alter the quality of life of a patient, it is another story.
The trial finally began
After several delays that had to do with the pandemic and the businesswoman’s pregnancy, the opening statements of the Holmes trial are scheduled for September 8, 2021 and the process is expected to last around 13 weeks, according to CNBC.
The former CEO of Theranos will accuse her former boyfriend and former partner “Sunny” Balwani, 56, of physical and mental abuse, according to documentation released on the morning of Saturday, August 28, as reported by NPR .
Holmes’s attorneys say the girl suffered a decade-long campaign of psychological abuse. According to the defense, this damaged his mental state at the time the alleged crimes with which he is accused were committed.
According to the documents , the young woman not only suffered psychological but also sexual and physical abuse. According to what was written, Balwani controlled the calls, texts and emails. Likewise, her ex-partner used physical violence such as throwing hard and sharp objects at her, controlling her eating, dressing and even restricting her sleep hours.
Image: Amazon / Gilbert Carrasquillo | Getty Images
Holmes is expected to argue that her former partner’s actions amounted to “dominating her and erasing her ability to make decisions,” including her ability to “deceive her victims,” according to the documents .
Elizabeth Holmes met “Sunny” at 18, later the man became president and COO of Theranos, now both face fraud charges and their trials are being held separately.
“Failure is not a crime”
The prosecution claimed that in 2019, when Theranos had lost interest and potential funding from major pharmaceutical companies such as Pfizer, the fraud began.
The defense responded to this, led by Holmes’s attorney, Lance Wade.
“Failure is not a crime. Going ahead and falling short is not a crime, “Wade said in the defense’s opening statement. she breathes and she did the best she could every day. And she is innocent. “
Wade claims Holmes was an enthusiastic businesswoman with a breakthrough idea in a “go all-in” technology, but fell victim to the reality that Theranos “couldn’t overcome business hurdles that others saw but naively underestimated.
It has been reported that it is “very likely” that Holmes herself will take the stand as a witness during the trial, although nothing has been officially confirmed.
There will be no audio or video recordings inside the courtroom during the entire trial.