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Elizabeth Holmes, founder of the blood test company Theranos, will go to court on Tuesday, while the jury’s selection begins in one of the largest trials involving alleged fraud in Silicon Valley.
Holmes is facing charges that he deceived investors and patients by making false allegations about Theranos’ blood tests and the financial position of the company. Her trial will be held in federal court in San Jose, California, with opening arguments expected to be heard next week.
Ramesh Balwani, the former president of Theranos and Holmes’ ex-boyfriend, will stand trial separately next year. Both pleaded not guilty.
Holmes ‘trial points to a long-awaited source for Theranos’ story, which was valued at $ 9 billion by investors and considered revolutionary before crumbling as evidence gathered against the accuracy of its blood test technology.
The proceedings could also be a crucial test for the blurred lines between cheerful forecasts and outright fraud at tech companies, as venture capitalists are pumping record amounts of money into young but promising businesses.
Theranos claims to be developing technology that will perform a series of medical tests with just a few drops of blood. It has entered into an agreement to provide testing services to Walgreens patients and has raised a total of more than $ 700 million from investors, including the company DFJ, the Walton family of Walmart and the media magnate Rupert Murdoch.
However, the company began to unravel after the Wall Street Journal reported in 2015, he used general diagnostic equipment, rather than proprietary technology, to perform many tests.
The U.S. Department of Justice sued Holmes and Balwani three years later, alleging that they had deliberately misled doctors and patients while promoting Theranos technology, and that they had misrepresented the company’s financial position and prospects to investors.
Balwani, Holmes and Theranos had previously settled fraud charges with the Securities and Exchange Commission, with Holmes agreeing to pay a $ 500,000 fine and giving up her shares in the company. The company dissolved and transferred its patents to Fortress Investment Group, one of its lenders.
It is unclear whether Holmes, represented by litigation firm Williams & Connolly, will take the position to testify at her own trial. Her lawyers did not immediately respond to a request for comment.
The proceedings were repeatedly delayed by the coronavirus pandemic, and Holmes gave birth to a baby in July.
Over the weekend, unsealed court documents showed Holmes’ lawyers argued that Balwani had abused her and caused post-traumatic stress disorder. Balwani’s lawyers have denied the allegations.