Jury selection began yesterday, and opening arguments are slated for next week.
Holmes, whose trial is expected to last three to four months, is battling 12 counts of fraud and conspiracy to commit wire fraud over false claims she made about Theranos’ blood tests and business. (Source: Boston Globe)
She's pleading not guilty, as is her fellow accusee, Ramesh "Sunny" Balwani. Balwani was her partner at Theranos, a once high-flying Silicon Valley unicorn with a valuation that for a while there made Holmes the wealthiest female self-made billionaire in the country. (Balwani and Holmes were also BF and GF. Awwwwww.) Originally, they were scheduled to be tried together, but the trial has been decoupled, presumably so that they can each use the other as the fall guy responsible for the whole debacle.
The Justice Department’s indictment...accused Holmes and Balwani of telling investors that Theranos’ blood testing machines could quickly perform a full range of clinical tests using a finger stick sample of blood, even though both knew the tests were limited, unreliable, and slow. Holmes and Balwani also overstated Theranos’ business deals and told investors that the company would generate $1 billion in revenue in 2015, when it made only a few hundred thousand dollars, the indictment said.
Among the investors that Holmes managed to rope in were Henry Kissinger, Jim Mattis, and George Schultz - three alter cockers sucked in by Holmes' cool blonde looks (accentuated by her always-on black turtleneck - a nod to Steve Jobs' uniform), her genius, and her ability to spin a story. (Kissinger, Mattis, Schulz? I don't imagine I'm the only one in no-to-little sympathy mode.)
The story Holmes was spinning ended up spinning out of control. The Theranos machines just plain didn't do what was claimed. The blood testing world wasn't revolutionized. Theranos was a big nothing, ending up out of business and with a goose egg valuation.
And now Holmes is coming to trial. (Balwani's trial is scheduled for early 2022.)
The case hinges on Holmes’ knowledge of the problems with Theranos’ blood testing devices. Her lawyers could argue that she was merely the startup’s public face while Balwani and others handled the technology, legal experts said. They could make the case that the sophisticated investors who backed Holmes should have done better research on Theranos. And they could say that Holmes was simply following Silicon Valley’s norms of exaggeration in service of an ambitious mission.
Holmes has also claimed in court filings that Balwani was abusive and held "coercive control" over her, and I'm guessing that this is the way she'll play things.
Plus she's a new mother - her son was born in July - and I'm guessing that she'll play the Madonna and Child routine to the hilt.
Here I was, manipulated by that mean, old Sunny Balwani, a much older man, something of a Svengali. What was a young naive girl to do other than get swept away? But look at me now that I've found true love and motherhood. I'm a new woman! I can't possibly do any prison time. My bullshitting, investor bamboozling days are so in the past.
Yep, this one could get ugly. And there'll no doubt be some racial overtone in there, too. As in pretty and sweet young blonde thing taken in by this not-all-that-attractive Pakistani POC.
While Holmes plays whatever games she's going to play, the United States of America will present evidence of her lying to investors, And this, which could be even more damning:
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. (Source: NPR)
Conning investors is one thing. As is bullshitting about your products in general. (Let he who is without bullshitting about their products sin cast the first stone.) But bullshitting about your product when it's life and death? And mother who "was incorrectly told she had miscarried her baby" vs. Mommy defendant Elizabeth Holmes? That'll be interesting.
Should Elizabeth Holmes do time? That's up to the jury - which I wouldn't want to be on. Four months of paying close attention to legal back and forth? The only trial I was ever on lasted four days and that was exhausting enough.
Maybe Elizabeth Holmes has already gotten what she deserved. She paid a quasi-hefty SEC fine, and her reputation as a wunderkind is certainly in tatters. Who's going to listen to her? Who's going to buy her bullshit? Who's going to invest in her next big idea? Other than her husband, I guess. He's the scion of a wealthy hotel chain owning family.
Maybe she has mental health issues. There are plenty of pictures in which she looks, for lack of a better word, crazy. (But is it all part of the con?)
The Globe article on Holmes asks the question whether she's "schemer or naïf." Me? I'm going with schemer, although being so very young at the time may have factored in.
Time will tell whether she can put her brilliance to good use at some point down the line. I'm not betting against that. But I'm not betting on it, either.
See you in court!
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A Pink Slip walk down memory lane with Elizabeth Holmes: Blood Unicorn - March 2018, and It used to be good to be Elizabeth Holmes (didn't it?) - June 2016.
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