Tue. Dec 7th, 2021

Who is actually Blood-testing startup responsible for the spectacular fall of Theranos? Is it Elizabeth Holmes, the founder of Girl Boss, who encounters 11 counts of wire forgery To confuse the accused investors? Or is it the employees of the company who have signed off on various reports that the technology has performed well? What about Theranos board members – such as George Schultz, James Mattis and Henry Kissinger – who were paid several thousand dollars to advise the company? Or Holmes’ business partner and ex-boyfriend Ramesh Balwani, who has faced 11 separate frauds?

Each of these theories has been explored over the past several days, as Holmes took a position on an 11-week trial that fascinated Silicon Valley and beyond. This is the first time since Theranos officially closed in 2018 that he has told his own story, the same year he was charged with fraud.

Holmes began his testimony Friday afternoon, which led to a record number of people appearing outside court on Monday and Tuesday morning. While waiting for one of the limited seats at the San Jose Courthouse, visitors began to line up at 2am this week, trembling. The crowd was full of journalists, concerned citizens and a screaming people “God bless you, girl!” Holmes arrived on Tuesday. Historian Margaret O’Mara says the Valley has never before seen a high-profile case of business fraud comparing glasses to the first iPhone release. Holmes benefited from the hype when his company was off the ground in the early 2000s. Found in a different kind of hype cycle.

As a young CEO, Holmes often portrayed himself as a perverted kid. He appeared on the cover of the magazine and welcomed the comparison with Steve Jobs. But in court, Holmes – who is now 37, and no longer wears his one-time trademark Black Turtleneck – insisted on parts of his work that he passed on to others.

When asked who was responsible for verifying that the blood tests worked as promised, Holmes pointed to Adam Rosendorf, the lab director at Theranos. An unrealistic partnership with Walgreens has come down to Daniel Young, the one Holmes called an “incredibly smart” employee. The decision not to disclose that Theranos sometimes uses third-party devices was blamed on the company’s legal advice, which Holmes said constituted a “trade confidentiality” of the information. Balwani, not Holmes, was in charge of the company’s financial estimates. And famous marketing, suggesting Theranos used only “a drop of blood”? Holmes testified that he did not personally sign off on every piece of marketing material that was created by Chiat Day, an expensive advertising agency he hired.

Reading and writing about Stanford’s criminal law, David Scolansky says the spread of such crimes is very common in fraud cases. “This is probably the most common type of defense mounted in cases involving large-scale financial fraud allegations,” he said. “Whether it works depends on how credible it is to the jury.”

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