For three years, Elizabeth Holmes has faced public opinion court because countless books, articles, documentaries and TV shows have dropped out every last drop in the blood-testing startup’s story. Theranos. Now an actual court has given the final verdict. On Monday, after seven days of deliberations, a jury in San Jose, California, found him guilty of four counts of wire fraud and four counts of conspiracy to commit wire fraud. The jury reversed four more convictions and failed to agree on three.
Each of the four guilty allegations involves Theranos investors, who say they were confused about Theranos’ power and who lost millions of dollars after the company’s death. Holmes now faces up to 20 years in prison for each conviction. (The judge has not yet set a date for the sentencing hearing.)
Prosecution for the last three months Made his case Holmes knowingly “chose fraud for business failure,” persuaded his investors to inject more money into the company despite his failure. Twenty-nine witnesses testified, with former employees testifying that while Theranos’ technology did not live up to its promise, Holmes encouraged them to cover it up. A former product manager says the company made fake demos and removed unusual results when sending reports to investors. Another revealed that Holmes had exaggerated partnerships with pharmaceutical companies, created non-existent military agreements, and pasted the pharmaceutical logo on Theranos’ report, misleading investors and potential partners who support blood-testing technology. A journalist from Luck, Who wrote one Cover story Speaking about Theranos in 2014, Holmes reportedly failed to correct numerous errors in reporting, as this has helped the company to look more capable than it actually is.
Mountains of evidence, including text messages, emails and company documents, show that Theranos technology was obsolete, and failed to adhere to its founder’s vision as the future of blood testing. The lawsuit, however, depends on whether Holmes, as the company’s CEO, knowingly deceived investors and patients, or whether he acted in good faith as a struggling entrepreneur. “The battlefield is Holmes’s state of mind: whether he had it or not Intention To commit fraud, “said James Melendres, a former federal prosecutor and partner in the business law firm Snell & Wilmer. “You have 12 judges – 12 people down the street – who sit in a room and decide what Holmes had in mind.” The jury did not find Holmes guilty of involving patients, two of whom received fake test results from Theranos’ blood test technology.
Defendant summoned three witnesses, Including Holmes himself, Who spent seven days in the stand to spread the blame among many of Theranos’ scientific advisers and board members. Many of Theranos employees had many years of experience working in biotechnology; Holmes, by comparison, dropped out of Stanford in his second year.
He testified that Ramesh “Sunny” Balwani, his former business partner and ex-boyfriend, was responsible for making false financial statements and overseeing Theranos’ labs. Holmes added that Balwani controlled and abused her, affecting her mental state in her later years in Theranos. Balwani faced his own criminal trial later this year.
Holmes’s case has been seen as the Silicon Valley Decade of Judgment, as well as an accusation in the startup culture itself: When does an founder cheat? Melendres called the decision a “bellwether”, noting that it could be a landmark case for the startup management of the judiciary.
For the rest of Silicon Valley, the case may be a reminder that there is a limit to how much startups can get rid of – and the government is watching. “The government usually wins these things,” said Jennifer Kennedy Park, a partner at Cleary Gottlieb Stein & Hamilton. He also noted the huge resources and subpona capabilities that could give prosecutors an advantage. This case shows that the founders are not limited.
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