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Elizabeth Holmes deliberately misled investors about the capabilities of the blood testing technology at Theranos and is guilty of three counts of wire fraud, a jury found today. She is also guilty of conspiracy to defraud investors with her co-defendant, Sunny Balwani.
She faces up to 20 years in prison for each of the counts. The jury found her not guilty of two counts of defrauding patients and not guilty of conspiracy to defraud patients. The jury did not return a verdict on three more counts of defrauding investors.
Holmes was the founder and CEO of Theranos, a company that promised to revolutionize blood testing by developing a device that could run hundreds of medical tests on just a few drops of blood. The company was an immediate sensation in Silicon Valley and, at one point, was valued at more than $9 billion.
But in 2015, an exposé in The Wall Street Journal revealed major problems with Theranos’ tech, and federal investigations found problems that jeopardized patient safety at its labs. The company closed its labs in 2016, and in 2018, Holmes and her former partner, Theranos president Balwani, were charged with wire fraud and conspiracy in federal court. The US government is alleging that Holmes and Balwani deliberately misled investors and the public about the reliability of Theranos’ blood testing technology.
The Holmes trial, delayed for months because of the COVID-19 pandemic and Holmes’ pregnancy, started in September and stretched out for three months. Day to day, testimony was slowed down by jurors being dismissed, COVID-19 exposures, a burst pipe, and lectures from the judge about loud typing in the gallery. Over two dozen witnesses testified, and Holmes spent seven days on the stand in her own defense.
Holmes said during her testimony that she didn’t try to mislead investors about what the Theranos blood testing program was capable of. She deflected blame for any errors to others at the company and insinuated that investors just misinterpreted some of her statements about what Theranos was doing. At the same time, she admitted to adding logos from pharmaceutical companies to Theranos-produced lab reports without those companies’ authorization or knowledge, and the jury heard recordings and saw videos of her lying about what types of blood tests the company could do.
To find her guilty of fraud, the jury had to be unanimously convinced that Holmes knew that the information she gave to investors or to patients was misleading and that she gave that information intentionally in order to convince them to give money to Theranos.
Balwani now faces his own fraud trial for the same charges, which is set to begin in February.